Investigating the twin-deficit phenomenon among oil-exporting countries: Does oil really matter?

This study empirically investigates the existence of twin deficits—the impact of fiscal policy on the current account—among selected major oil-exporting countries. Given the huge effects of the oil proceeds on these economies, the study separates the effects of oil on the fiscal balance from its effect on the current account balance. The investigation took a further step by grouping these countries—based on their fiscal policy actions over the period of years under review—into pro-cyclical and counter-cyclical fiscal countries. In line with the existing literature, the impact of fiscal balance on the current account balance takes into consideration the contemporaneous effects brought about by exchange rate fluctuations, the growth in GDP, rate of openness and the growth in money supply. The models are estimated based on a panel of 31 oil-exporting countries over the period 1984–2013, using the two-stage least squares estimation techniques. The results from all countries estimations reveal the existence of twin-deficit in the total economy. In the non-oil economy, on the other hand, the evidence of twin-deficit disappears. This evidence is also reported in the counter-cyclical fiscal countries. Results from pro-cyclical fiscal countries indicated the total opposite, revealing the existence of twin-deficit in the non-oil economy, while this evidence does not occur in the total economy. The indisputable conclusion is that oil dominance continues to blur the existence of twin deficits among the oil-exporting countries.     

Interrelationship between crude oil and the stock markets of major demanders and suppliers in emerging and developed markets

This paper investigates the time-varying relationship between the stock markets of advanced and emerging oil-exporting and oil-importing countries and the international crude oil price indices. The results reveal that the time-varying among the oil-exporting and oil-importing countries responds similarly to aggregate supply- and demand-side effects. Oil-exporting countries have a slightly higher integration with the oil markets, while oil supply shocks have a slightly higher impact on emerging oil-exporting countries. The oil markets exhibit a lower time-varying relationship with the Asia-Pacific oil-importing markets, which indicates those markets may be attractive to investors during periods of turbulence in the oil market.     

Income growth,debt and deficits: lessons from subSaharan Africa

This paper investigates the growth potential of subSaharan African countries to feed their growing populations. A model is specified that incorporates the effects of government consumption as well as the servicing of external debt, two issues over which concern has been expressed. In terms of income per head, it is found that only two countries (Kenya and Malawi) show positive growth, apart from oil-exporting countries. This raises serious questions about the ability of these countries to feed their growing populations. In particular it seems that Ghana and Zambia may face acute shortages of food in the near future, unless there is a change of policy.     

Oil shocks and stock volatility: new evidence via a Bayesian,graph-based VAR approach

ABSTRACT

This article examines the temporal dependence between three oil shocks and realized volatility in the stock markets of G20 countries between 1994 and 2019. By applying a novel, graphical, Bayesian VAR (BGVAR) model, we calculate unidirectional linkages of oil and stock volatility with a full and segmented sample. The results suggest an overall causality from stock volatility to oil shocks. For certain short, specific periods, the causal direction reverses. Depending on the country and the source of an oil shock, the magnitude and type of the effect can vary considerably. Specific oil-market shocks occur most often in our full sample. In a time-varying structure, oil supply shocks’ impact on stock volatility is more prominent, and net oil-importing countries’ responses to these shocks are greater than for oil-exporting countries. In addition, we find that relationship dynamics can capture market information, such as global economic growth during the 2008–2009 financial crisis.     

Exchange rates of oil exporting countries and global oil price shocks: a nonlinear smooth-transition approach

This paper models logistic and exponential smooth transition adjustments of real exchange rates for six major oil-exporting countries in response to different shocks affecting oil prices. The logistic form captures asymmetric and the exponential form symmetric adjustments in regards to positive and negative oil price shocks. We chose oil-exporting countries that do not peg their exchange rates. For most countries, we detect no statistically significant non-linearities for the adjustment process of real exchange rate returns, be they asymmetric or symmetric, in response to oil supply shocks, idiosyncratic oil-market-specific shocks, and speculative oil-market shocks. Exceptions are oil supply shocks in the UK and possibly Brazil, where exchange rates respond nonlinearly, though the effects are symmetric for both countries. On the other hand, global aggregate demand shocks, which are shocks not originating directly in the oil market, have nonlinear asymmetric effects on real exchange rate returns for Canada, Mexico, Norway and Russia, and nonlinear symmetric effects for Brazil and the UK.     

中国共享式经济增长实证研究——基于公共支出、部门效应和政府治理的分析

文章首先基于多维贫困指标SHPI构建了共享式增长指数PEG,然后运用公共支出、政府治理水平和部门效应三个方面的指标来考察共享式增长。文章具体通过协整和误差修正模型分析了长期和短期影响共享式增长的主要因素及其调整机制,并在此基础上重点估计了各部门公共支出对共享式增长的影响。文章发现1978-2008年中国经济增长总体上具有共享性,但是大部分年份的共享程度较低。长期内,在公共支出、部门效应和政府治理水平三大类因素中公共支出方面的三个变量对PEG的影响最大。短期内,政府一般性支出和政府规模对共享式增长程度有非常显著的消极影响。     

Oil,Growth, and Health: What Does the Cross‐Country Evidence Really Show?*

We show that previous results from the body of literature on the resource curse have primarily been driven by the collapse in oil prices during the mid‐1980s. By exploiting cross‐country variations in the size of initial oil endowments and the timing of oil discoveries, we find that there is a stable positive relationship between oil abundance and long‐run economic growth. Using dynamic panel data methods, we also find that there is no evidence that higher oil rents hinder growth. However, to focus on material gain means that the welfare gain from oil is understated, because oil‐rich countries benefit more by the reduction in infant mortality and the gain in longevity. Interestingly, such oil‐led health improvements are more pronounced in non‐democratic countries, where initial heath conditions were poor and oil wealth is concentrated among the ruling elites.     

我国的政府教育支出与经济增长——基于1980—2011年的数据分析

对于政府教育支出与经济增长的关系实证研究并没有确定的结论。本文利用我国1980-2011年的时间序列数据分析了政府教育支出对经济增长的影响。实证研究表明,无论是在长期还是短期内政府教育支出都对经济增长具有正的显著的影响,即我国的政府教育支出能够促进经济增长。 Granger因果检验表明,我国的政府教育支出与经济增长之间存在双向因果关系。另外,长期中政府教育支出对经济增长的影响效果大于短期。这说明政府教育支出对经济增长的影响是个长期的累积过程,因而教育投入不应该是一种短期行为。目前我国政府的教育支出仍处于相对较低的水平,具有较大的提升空间,从而具有推动经济增长的巨大潜力。因此,为保持经济的持续增长,在近期和长期内不断加大政府对教育的投入、优化教育资源的配置应是一项极其重要的教育政策。     

政府补贴对军民融合企业创新的影响——基于动态面板模型

为推进军民融合创新发展、优化政府资源配置,研究政府补贴对军民融合企业创新的影响具有现实价值。选取2007-2018年127家军民融合企业样本进行实证研究,纳入地方财政科技支出作为调节变量,以企业寻租变量作为政府补贴的外生工具变量,构建政府补贴对军民融合企业创新投入影响的动态面板模型。使用差分GMM法进行回归估计,结果显示,军民融合企业往期研发投入对当期研发投入有影响,政府补贴对军民融合企业研发投入具有正向影响,地方财政科技支出对政府补贴的正向影响具有放大效应。在实证研究基础上,为促进军民融合协同创新提出政策建议。     

THE IMPACT OF GOVERNMENT EXPENDITURE ON GROWTH: EMPIRICAL EVIDENCE FROM A HETEROGENEOUS PANEL

This paper investigates the impact of government expenditure on growth, in a heterogeneous panel, for a sample of developing countries. Using generalized method of moments techniques, we show that countries with substantial government current expenditure have strong growth effects, which vary considerably across the nations.     

The Dutch disease revisited: absorption constraint and learning by doing

This paper revisits the Dutch disease by analyzing the general equilibrium effects of a resource shock on a dependent economy, both in a static and dynamic setting. The novel aspect of this study is to incorporate in one coherent framework two distinct features of the Dutch disease literature that have previously been analyzed in isolation: capital accumulation with absorption constraint, and productivity growth induced by learning-by-doing. The result of long run exchange rate appreciation is maintained in line with part of the Dutch Disease literature. In addition, a permanent change in the employment shares occurs after the resource windfall, in favor of the non-traded sector and away from the traded sector growth engine of the economy. In other words, in the long run both of the classic symptoms of the Dutch Disease remain in place.     

Is education important in assessing the impact of institutions on economic growth in emerging economies?

ABSTRACT

In this article, we empirically revise the hypothesis that institutions cause economic growth for emerging countries starting from a theoretical model. Our sample consists of 21 countries covering different zones: European Emerging, Asia Pacific Emerging, Latin America, Middle-East and Africa while the status advanced versus secondary emerging countries based on FTSE (Financial Times Stock Exchange) classification is accounted for. The period analysed is 1995–2014. The methodology is based on System GMM estimator of Arellano-Bover and Blundell-Bond for dynamic panel data. Empirical findings suggest that only variables such as voice and accountability and government effectiveness have a significant positive impact on economic growth rates of the analysed countries. In the presence of control variables, i.e. trade and government final consumption, results are robust. Results remain robust for countries that have a high level of government expenditure on tertiary education which proves the role of education in assessing the impact of institutions on economic growth.     

Resource discovery and the politics of fiscal decentralization

If the central government is a revenue maximizing Leviathan then resource discovery and democratization should have discernible impacts on the degree of fiscal decentralization. We systematically explore these effects by exploiting exogenous variation in giant oil and mineral discoveries and permanent democratization. Using a global dataset of 77 countries over the period 1970–2012 we find that resource discovery has very little effect on revenue decentralization but induces expenditure centralization. Oil discovery appears to be the main driver of centralization and not minerals. Resource discovery leads to centralization in locations which have not experienced permanent democratization. Tax and intergovernmental transfers respond most to resource discovery shocks and democratization whereas own source revenue, property tax, educational expenditure, and health expenditure do not seem to be affected. Higher resource rent leads to more centralization and the effect is moderated by democratization.     

Cyclical Multiplier and Zero Low Bound Effects of Government Expenditure on Economic Growth: Evidence for Greece

This study explores the impact of government expenditure multipliers on economic growth utilising an Autoregressive Distributed Lag (ARDL) approach. We provide evidence on the short‐term dynamics as well as the long‐run expenditure multiplier effects on economic growth for the Greek economy over the period 1960–2014. We find that the size of the multiplier does not differ substantially over the phases of the business cycle. Our results also indicate that irrespective of the scale of inflation, government expenditure positively affects economic growth, whilst inconclusive evidence is obtained in the case of exceptionally low interest rates.     

Fiscal Deficit and Economic Growth Nexus in India: A Simultaneous Error Correction Approach

This paper examines the impact of fiscal deficit on economic growth in India, during the period from 1970–71 to 2018–19. Using a combination of Autoregressive Distributed Lag and Simultaneous Error Correction Approach, this study shows that fiscal deficit and revenue deficit have an adverse effect on economic growth both in the long run and in the short run. The empirical analysis confirms that fiscal deficit influences economic growth both directly, and indirectly through the routes of investment, interest rate, current account deficit and composition of government expenditure. Further, gross investment has a positive and inflation rate has a negative impact on economic growth. For a policy perspective, the government should control fiscal deficit and revenue deficit as suggested by the FRBM Act. The composition of government expenditure should be altered to devote more resources for the formation of productive capital in India.

     

Cyclical fiscal rules for oil-exporting countries

Budget-balance tax-gap rules are preferred to other fiscal policy rules to stabilize the macroeconomic volatility and welfare in oil-exporting countries. The output-inflation trade-off is of particular concern for oil exporters relative to non-oil commodity exporters due to the pass through of oil prices into headline inflation which warrants fiscal reaction to crude oil revenue. This result is robust to several instruments satisfying the rule but with reduced efficiency for those instruments that impact potential output such as government investment and capital taxes. These rules are desirable for fixed exchange rate regimes but are unable to achieve the same degree of stability as when coordinated with inflation-targeting monetary policy. Even under optimal inflation-targeting regimes, the adoption of budget-balance tax-gap rules can produce reductions in macroeconomic volatility and welfare gains.     

Fiscal sustainability,volatility and oil wealth

Whether fiscal policy is sustainable depends on a government’s future revenue and expenditure streams, both of which are highly uncertain. In commodity‐rich countries, this problem is intensified by unpredictable and volatile commodity prices. We show how spending rules for oil income and non‐oil primary deficits interact and influence the stochastic distribution of future debt stocks and demonstrate the variance reducing impact of feedback rules for primary deficits in a case study of oil‐and‐gas exporter Azerbaijan.     

Growth effects of public expenditure on the state and local level: evidence from a sample of rich governments

There is a vast empirical literature investigating the relationship between government size and economic growth. But the empirical evidence of growth effects of public expenditure using cross-country regressions is still inconclusive. According to a number of authors this is not surprising since the negative relationship only applies for rich countries with a large public sector. Restricting their analysis on rich countries only they can show the predicted negative impact. Naturally, a selection of a sub-sample of rich countries is always somewhat arbitrary. Another possibility is to concentrate on governments within a rich country. However, only few studies investigate the effect of state and local spending on economic growth. This study concentrates on the relationship between public expenditure and economic growth within a rich country using the full sample of state and local governments from Switzerland over the 1981–2001 period. The general finding is a fairly robust negative relationship between government size and economic growth. However, in contrast to public spending from operating budgets there is no significant impact on economic growth by expenditure from capital budgets.     

Natural Resource Booms and Inequality: Theory and Evidence*

We develop a theory, in the context of a two‐sector growth model in which learning‐by‐doing drives growth, to explain the time path of income inequality following natural resource booms in resource‐rich countries. Under the condition of a relatively unskilled labor intensive non‐traded sector, inequality falls immediately after a boom, and then increases steadily over time until the initial impact of the boom disappears. Using data for 90 countries between 1965 and 1999, we find evidence in support of the theory, especially for oil and mineral booms. We also find that uncertainty about future commodity prices increases long‐run inequality.     

Oil price shocks and stock market activities: Evidence from oil-importing and oil-exporting countries

While the relationship between oil prices and stock markets is of great interest to economists, previous studies do not differentiate oil-exporting countries from oil-importing countries when they investigate the effects of oil price shocks on stock market returns. In this paper, we address this limitation using a structural VAR analysis. Our main findings can be summarized as follows: First, the magnitude, duration, and even direction of response by stock market in a country to oil price shocks highly depend on whether the country is a net importer or exporter in the world oil market, and whether changes in oil price are driven by supply or aggregate demand. Second, the relative contribution of each type of oil price shocks depends on the level of importance of oil to national economy, as well as the net position in oil market and the driving forces of oil price changes. Third, the effects of aggregate demand uncertainty on stock markets in oil-exporting countries are much stronger and more persistent than in oil-importing countries. Finally, positive aggregate and precautionary demand shocks are shown to result in a higher degree of co-movement among the stock markets in oil-exporting countries, but not among those in oil-importing countries.