Is economic growth for the birds?

The environment provides ecosystem services that support human wants. Economic growth is important for raising human living standards. But whether economic growth benefits the environment is unclear. Research into this relationship has focused on a U-shaped association known as the Environmental Kuznets Curve (EKC). As economies grow, environmental quality initially declines but ultimately recovers and improves. However, environmental quality has been narrowly defined in the research, largely neglecting the availability and range of ecosystem services. Because these services derive from biodiversity, we use avian biodiversity as a proxy for environmental quality. Our results replace the U-shaped relationship with a lazy-S relationship. As economies grow, environmental quality initially declines, then improves over intermediate growth, but ultimately declines at higher growth. The EKC hypothesis has been used to forward economic growth as a means for improving environment quality. Our results call into question policies that rely solely on economic growth for reversing environmental decline.     

Can everyone benefit from economic integration?

There is no Pareto efficient allocation rule which always encourages economic integration. Further, for any efficient rule treating indistinguishable agents identically in welfare terms, there is an economy in which a third of the agents are hurt upon integration.     

Does economic freedom increase income inequality? Evidence from the EU countries

This paper examines the relationship between economic liberalization and income inequality in the EU using panel data for the 2000s. The empirical evidence suggests that economic freedom is strongly related to income inequality. However, not all areas of economic freedom affect income distribution similarly. Government size is robustly associated with inequality, and also when controlling for potential endogeneity in a dynamic panel data analysis. Regulation is linked to income inequality as well, whereas legal system and sound money have no significant effects on income distribution. In the case of freedom to trade internationally, the relationship differs between old (EU-15) and new (former socialist) EU countries.     

Do income tax breaks for the elderly affect economic growth?

Income tax breaks for elderly taxpayers are sizable, widespread, and potentially affect growth through migration and other behaviors. We provide the first investigation into the growth effects of differential tax policy by age, taking a multi-pronged empirical approach to US state-level data since 1977. Some analyses include panel error-correction models combined with variation in state-level policies over time. Alternative analyses use how changes in federal tax law manifest at the state-level. Results suggest that taxes on lower income taxpayers, of any age, decrease growth the most, while taxing the high income elderly—those targeted recently—has little effect.     

Is the shadow economy a bane or boon for economic growth?

This paper uses the theoretical framework developed by Feder (1983) and Ram (1986) to examine interactions (i.e. externalities and intersectoral factor productivity differentials) between the official and unofficial sectors of the economy. Results from the empirical analysis, using data on over 100 countries from 1970 to 2008, suggest that the marginal externality effect of growth in the unofficial sector on the official sector is positive. Further, input productivities are higher in the unofficial sector relative to the official sector. These results are robust using alternate measures of the (unobserved) unofficial economy and across level of development.     

Will India Be the Next China? Challenges,Prospects and Implications for Australia

India's recent growth performance has been impressive and it appears set to again become a major global economic power. But, sustaining this growth poses formidable challenges. Australia stands to gain much from India's growth. In this article, we review recent developments in the Indian economy, identify policy challenges and discuss short‐to‐medium term prospects, noting some of the main similarities and differences between China and India. Then, we look at opportunities for significant growth in Australian–Indian economic links and policy implications including the possible role of a free trade agreement.     

Deepening the economic reform from the relationship between man and nature

Since 1978, China has gained worldwide shin- ing achievements following the idea of seeking the truth of the fact to carry out economic reform for over 20 years. From the relationship between hu- man being and nature, the economic development has entered a new era, eco-era. The new era re- quires us to further deepen economic reform from the relationship of human being and nature while we are keeping on economic reform based on the relationship between human beings so as to realize sustainable…     

Does economic policy uncertainty matter for commodity market in China? Evidence from quantile regression

ABSTRACT

This paper investigates the effect of economic policy uncertainty (EPU) on China’s agricultural and metal commodity futures returns across quantiles. We address this issue using the panel quantile regression approach, which allows for a more complete analysis of various conditions in the commodity market (i.e. bearish, normal, and bullish markets). Our empirical results reveal that domestic EPU shocks have a significantly negative effect on agricultural futures returns in bearish markets and a significantly positive effect on metal futures returns in bullish markets. The impacts of both domestic and U.S. EPU shocks on commodity markets are heterogeneous across quantiles and are sector specific. Additionally, by isolating positive and negative EPU shocks, the regression and test results indicate an asymmetric response of commodity futures prices in bullish markets. Moreover, our findings indicate that the metal futures market has a higher financialisation level than the agricultural futures market. The findings can be utilized by policymakers and investors.     

Are economic growth and the variability of the business cycle related? Evidence from five European countries

We use a long series of annual data that span over 100 years to examine the relationship between output growth and its uncertainty in five European countries. Using the GARCH methodology to proxy uncertainty, we obtain two important results. First, more uncertainty about output leads to a higher rate of growth in three of the five countries. Second, output growth reduces its uncertainty in all countries except one. Our results are robust to alternative specifications and provide strong support to the recent emphasis by macroeconomists on the joint examination of economic growth and the variability of the business cycle.     

On the economic factors of deforestation: What can we learn from quantile analysis?

The deforestation factors at a global level have been widely studied in the empirical economic literature. However, the high heterogeneity among countries considerably limits the overall significance of the results. Using quantile approach, we show thatsome major deforestation factors are more prevalent in high deforestation countries, giving the insight that those factors have been under-estimated in previous studies.     

Does the recognition of indigenous territories impact household economic situations? Evidence from western Panama

The Government of Panama created a semi-autonomous indigenous area in 1997. The establishment of this region institutionalizes indigenous authorities and prohibits land privatization. This study investigates the effect of the recognition of common property land to indigenous groups on economic performance. By using difference-in-differences approach at household-level data, I find that non-migrant indigenous households living in the semi-autonomous territory declined their consumption relative to their counterparts living outside. Further, indigenous households living in the semi-autonomous territory have lower access to public goods and are less likely to participate in agricultural market activities.     

How does economic policy uncertainty drive gold–stock correlations? Evidence from the UK

In this article, we investigate the effects of economic policy uncertainty (EPU) on correlations between the UK stock market and gold market. We find that less certain economic policies result in lower correlations, while more certain economic policies result in higher correlations. The correlations are symmetric and show no structural breaks caused by the recent financial crisis. The recent financial crisis has not changed EPU effects on the correlations. The effects of one positive one-standard-deviation shock of the logarithmic change rate of the EPU on the correlations last approximately 19 months.     

When do neoliberal economic reforms cause democratic decline? Evidence from the post-communist Southeast Europe

Do neoliberal reforms (notably, austerity policy) facilitate democratic decline and the gradual deconstruction of democratic institutions? I examine the democratic development of the Western Balkan countries since 2008 by focusing on the two most recent cases of democratic rollback in Macedonia and Serbia. Neoliberal reforms may create a preference to shut down democratic institutions, because such reforms are socially costly and politically risky. However, democratic backsliding is not possible without opportunity. I illustrate this with reference to the examples of Hungary and Croatia. Croatia implemented some neoliberal policies after 2015, but did not see a drop in its democracy score. By contrast, Hungary moved towards centrally planned capitalism, nationalisation and state interventionism (all opposed to the neoliberal concept of reform), and yet saw a significant democratic decline after 2010. The opportunity to dismantle democratic institutions was a consequence of an electoral gap (a difference in vote share between former and new incumbents), which enabled the rise of authoritarian leaders in Macedonia, Hungary and Serbia.     

Schutz,Machlup and rational economic man: some problems for economic imperialism?

Starting from a question posed by Schutz's ‘postulate of adequacy’, and its enndorsement by Machlup, the author asks what constraints there should be in the representation of human action in our models, given that it is our action that is being represented. He argues that metholdological individualism has, historically, been interpreted in two different ways: as leading to subjectivism or to mamimization approaches which exhibit little interest in the specific content of people's motivation. The author suggests that the latter should be seen as a special case of the former, which there is a rationale for adopting only in distinctive circumstances. ‘Economic imperialism’, however, typically extends the latter approach without regard to the presence of the factors which legitimate its use within economics. The paper also contains some more general argument concerning how subjectivism may be combined with realism, and a comparison of the author's conclusions with those of Machlup.     

Do economic sanctions affect protectionism? Evidence from agricultural support

The objective of this paper is to examine whether economic sanctions contribute to influencing the target countries’ protectionist policies in the agricultural sector. Using pooled mean group estimations in a dynamic heterogeneous panel setting, we find robust empirical evidence that, in the long‐run, economic sanctions decrease agricultural protection in the target counties, and this effect is mitigated by the wealth of the target's economy. However, the relationship is insignificant in the short run. Furthermore, our results also suggest that the impact of sanctions on agricultural protection (a) increases with the severity of economic sanctions, (b) is greater for multilateral sanctions than unilateral sanctions, and (c) is more severe on agricultural protection when sanctions span a longer duration.     

Assessing economic convergence in the EU: is there a perspective for the ‘cohesion countries’?

This article analyses the stochastic income convergence within the EU-15. The empirical analysis uses per capita GDP, in PPP and in constant prices of 2005 for the period 1950 to 2010. Apart from the traditional DF type tests we also account for possible structural changes. In this direction, we employ the Zivot-Andrews (1992) and the Lee-Strazicich (1999, 2003) testing procedures, for one and two breaks, endogenously determined. Furthermore, we apply the Carlino and Mills (1993) methodology proposed for the detection of β-convergence. The overall evidence supports the existence of two discrete clubs, the first by the ‘cohesion countries’ (Portugal, Ireland, Greece and Spain) and the second by the remaining members. In particular, there is a clear evidence of convergence within each club, whereas between clubs there is a luck of catching-up effects. Furthermore, investigation of correlation between relative per capita GDP of each country and several factors that are often identified as growth stimulants, namely Total Factor Productivity, FDI, investment and openness confirm, with the exception of Greece, a strong association between these factors and the convergence process. However, progress in the convergence has not been uniform across countries and over time, reflecting the specific interactions between domestic and international factors and their impact on the convergence process of individual countries.     

Does the stock market cause economic growth? Portuguese evidence of economic regime change

The relationship between stock market and economic growth is tested for Portugal (1993–2011), which is a small open economy dependent on bank financing. The relationship between economic growth and bank financing is also appraised. Using Vector Autoregressive (VAR) modeling, Granger causality, variance decomposition and impulse response function are discussed. The physical replacement of the currency, as a consequence of the integration in the European Monetary Union, proves to be an economic regime change. The effect of the subprime crisis was also proved. There is evidence of Granger bidirectional causality between the stock market and economic growth. Meanwhile, there was no evidence of causality running from bank financing to economic growth.     

Has economic freedom fostered bank performance? Panel evidence from China

The impact of economic freedom on the well-being of the economy has been widely documented. Noticeably absent from the literature is empirical evidence on the impact of economic freedom on the banking sector. This article employs data on the Chinese banking sector and provides for the first time empirical evidence on the impact of economic freedom. We find evidence supporting far greater freedom for entrepreneurs to start businesses. The empirical findings seem to suggest that greater freedom of trade positively influences the performance of banks operating in the Chinese banking sector. However, the impact of the different dimensions of economic freedom is not uniform across Chinese banks with different ownership structures.