Multivariate filter estimation and ARDL model analysis of China’s potential output

In this article, we apply a new multivariate filter approach to estimate China’s potential output. Furthermore, we build an ARDL model to analyse the influence on potential growth caused by important factors that contribute to estimation and China’s development. Our results show that the current economic slowdown is not a cyclical phenomenon and China’s potential growth has declined since 2010. We also show that fixed asset investment and trade, which have a long-run relationship with potential output, exert negative long-run effect on potential growth justifying the implementation of China’s recent supply-side reforms.     

Imbalances over the Pacific

This paper examines various theories of current account (trade) imbalances between the U.S. and China, by estimating a structural VAR model with long-run zero restrictions. The factors that we examine include: productivity differential, fiscal policy, consumption/saving choice, and real and nominal demand side factors comprising monetary policy, and reserve accumulation. On average, technology shocks are found to play a dominant role in explaining the trade balance movement between China and the U.S. However, in the particular period of 2004–07 when global imbalances peaked, we find that demand shocks played an unusually large role. This contrast between the average tendency and the rather abnormal development in the mid-2000s provides general equilibrium evidence for several theories of current account (trade) balance imbalance. But it also shows that the experience of the mid-2000s does not have to repeat itself, given that it was an atypical development different from the average tendency.     

中国钢铁长期需求:影响因素与政策选择

近年来,我国钢铁工业得到了长足的发展。但随着国内外市场供求关系变化,钢铁工业供求结构不相适应的矛盾日益显现。钢铁工业要实现可持续发展,必须重视对市场长期需求规律的研究,将数量增长和产品结构调整相结合。本文利用协整方程对市场经济条件下经济增长等因素对我国钢铁工业推动作用进行动态分析,探讨钢铁市场的长期需求规律,对于当前钢铁产业政策发展导向、政策选择等提出建议。     

The interactions among foreign direct investment,economic growth,degree of openness and unemployment in Taiwan

The vector autoregression method of variance decomposition and impulse response function analysis are applied to analyse various relationships among foreign direct investment (FDI), economic growth, unemployment and degree of openness in Taiwan. The analysis results show that these five variables have a long-run equilibrium relationship; however, unemployment rate and FDI outflow have weak exogeneity. We also found that there exist three unidirectional causalities from FDI outflow to FDI inflow, from economic growth to degree of openness, and from economic growth to unemployment in short-run. Furthermore, the shocks of economic growth and degree of openness have positive effects on FDI inflow. On the contrary, the shocks in economic growth and FDI inflow have negative effects on unemployment rate.     

From the general to the specific: The demand for M2 in three European countries

This paper examines the demand for broad money in West Germany, the Netherlands and France. We give an exposition of and apply the “general to specific” econometric modelling methodology which has been successful in modelling the demand for money in the U.K. We find stable short-run demand functions for each of the three countries examined, using a consistent data base previously published by other researchers. Each of the estimated short-run equations has a long-run or steady-state solution which is consistent with economic theory. For West Germany and the Netherlands we find long-run income elasticities of unity, which constrasts with the results of earlier studies.     

中国经济转型与货币需求

本文采用"从一般到特殊"的动态建模方法对中国经济转型过程中的货币需求函数进行了再估计,通过引入市场化进程相对指数作为衡量经济转型的制度变量考察货币需求、经济增长、通货膨胀、利率和经济转型之间的相互关系。结果发现,尽管1978—2007年间30年的改革开放使得中国的经济体制和金融体系发生了较大的转型,但通过引入适当的制度变量,仍然可以得到稳定的货币需求函数。本文建立的货币需求动态模型证实了经济体制的市场化转型无论长短期都是拉动货币需求增加的因素,通货膨胀是解释货币量的有效外生解释变量,短期内利率变量对实际货币需求影响不显著,但其确实显著地进入了长期货币需求关系。     

Does monetary policy affect the long-run expectations of non-stationary real interest rates?

In this article, we analyse whether the monetary policy affects the long-run expectation of the non-stationary real interest rate. The analysis is conducted through Beveridge–Nelson trend decomposition within a cointegrated vector autoregressive model based on the New Keynesian framework. We suggest an augmented test of the conventional co-integration test on the non-stationarity of the real interest rate, which checks whether the co-integration coefficient of inflation is one and the output gap affects the co-integration equilibrium of the nominal interest rate. We further suggest decomposing the long-run expectation of the non-stationary real interest rate into three trends: the interest rate shock (including the monetary shock), inflation shock and output gap shock. According to empirical analyses using monthly US data after the Korean War, the long-run expectation of the non-stationary real interest rate contains an interest rate shock trend and the impulse of the federal fund target rate induces a significant response of the interest rate shock trend. However, the interest rate shock trend has a very small portion of the long-run expectation of the non-stationary real interest rate, which may explain why the monetary policy was not particularly effective in the economic recovery after the global financial crisis.     

流通业效率对制造业绩效的影响*——兼论供给侧结构性改革中的流通先导性

基于微观企业数据对我国流通业效率与制造业绩效的关系进行的实证结果发现：流通业效率对制造业绩效整体而言发挥正向作用。更具体地,零售业对制造业产能调整发挥着积极作用,而批发业效率提升则未对制造业绩效发挥显著作用。在未来持续推进的供给侧结构性改革中,应高度重视流通业对于有效反馈市场信息、调节上游生产、媒介供需匹配的先导性作用,在继续利用新技术提升零售业效率并发挥其先导性作用的同时,也应着力提升批发业效率及其引导产能资源配置、促进供需匹配的先导性潜能。     

Is energy consumption sensitive to foreign capital inflows and currency devaluation in Pakistan?

This study investigates the relationship between foreign capital inflows and energy consumption by incorporating economic growth, exports and currency devaluation in energy demand function for the case of Pakistan. The long-run and short-run effects are examined via ARDL bounds testing procedure. Foreign capital inflows and currency devaluation (economic growth and exports) decrease (increase) energy consumption in long-run. The results confirm a feedback effect between foreign capital inflows and energy consumption. These findings would be helpful to policy makers in designing comprehensive economic and energy policies for utilizing foreign capital inflows as a tool for optimal use of energy sources to enhance economic development in long run.     

Frontier Expansion and Economic Development

Although finding new frontiers or reserves of natural resources to exploit has been the basis of much of global economic development for the past 500 years, frontier-based development does not appear to be producing sustained high rates of growth in today's poorer economies. Through a two-sector model of frontier expansion and economic growth in a resource-dependent small open economy, this article demonstrates that such expansion will lead inevitably to a boom and bust pattern of long-run development, even if the economy's terms of trade or commodity prices remain unchanged. Initially, it is always optimal for the economy to choose the maximum rate of frontier expansion and thus ensure an immediate economic boom. However, an eventual economic decline is unavoidable. This result provides an alternative explanation of recent empirical evidence that resource-abundant developing countries display lower than expected long-run rates of growth. (JEL O13 , O41 , Q32 , Q33 )     

A quantitative reassessment of the finance–growth nexus: evidence from a multivariate VAR

The long-run relationship between financial development and economic growth is examined in a multivariate vector autoregression (VAR) framework using 10 sample countries. Difficulties surrounding the cross-country regressions and bivariate time series studies are outlined. The long-run financial development and output relationships are identified in a cointegrating framework through tests of over-identifying restrictions. We find bi-directional causality between financial development and economic growth in all the sample countries, conclusions that stand distinct from those in the existing empirical literature. We attribute our findings to: (i) analysis of a higher dimensional system, (ii) a new method of identifying the long-run economic relationships, and (iii) a new approach to long-run causality testing.     

新冠肺炎疫情的经济影响分析：长期视角与短期应对*

本文从需求和供给两侧分析了此次新冠疫情对我国经济的短期和长期影响。在需求侧,基于理论分析和非典疫情对经济的影响特征,经济总需求会随着此次疫情的结束而在短期内快速得到恢复。但此次疫情也会加大总需求和居民收入增速的下行压力。在供给侧,疫情不仅会降低劳动力资源配置效率,加剧劳动力供需结构矛盾,同时也大幅降低了我国的资本投资,在缺乏有效干预措施下,很可能加剧我国资本投资和经济总体增速的短期下滑趋势。而基于理论分析,相应供给冲击也将对我国长期产出带来增长压力。基于疫情对我国经济需求侧和供给侧的影响分析,2020年要实现全面建成小康社会的经济目标需要实施改革力度更大、更为有效的财政和货币等支持政策。     

新冠肺炎疫情的经济影响分析：长期视角与短期应对*

本文从需求和供给两侧分析了此次新冠疫情对我国经济的短期和长期影响。在需求侧，基于理论分析和非典疫情对经济的影响特征，经济总需求会随着此次疫情的结束而在短期内快速得到恢复。但此次疫情也会加大总需求和居民收入增速的下行压力。在供给侧，疫情不仅会降低劳动力资源配置效率，加剧劳动力供需结构矛盾，同时也大幅降低了我国的资本投资，在缺乏有效干预措施下，很可能加剧我国资本投资和经济总体增速的短期下滑趋势。而基于理论分析，相应供给冲击也将对我国长期产出带来增长压力。基于疫情对我国经济需求侧和供给侧的影响分析，2020年要实现全面建成小康社会的经济目标需要实施改革力度更大、更为有效的财政和货币等支持政策。     

Detecting multiple factors in panel data: an application on the growth of local regions in China

Due to unbalanced growth in China’s local regions, we construct a panel data model with multiple common factors to examine the differences among the growth factors in these areas. This article shows the various impacts from the supply and demand sides on economic growth. Different from the demand side, the supply-side impacts have permanent influences. This article focuses on these deep and profound impacts to explain the reasons behind China’s fast economic growing. By using data on 27 regions from 1958 to 2013, we summarize the main permanent influences along three lines. The first comes from the coastal regions, which have learned modern technology and systems from foreign companies, such as in Guangdong, Zhejiang, Fujian and Liaoning. The second comes from big cities, such as Beijing and Shanghai, in which a huge migration has given the companies opportunities to recruit excellent workers, making the resource allocation specialized and more efficient. The third is from the government’s major public works, which have improved areas’ infrastructure and assisted long-run economic growth, such as for Sichuan, Guangxi and Yunnan.     

Examining the link between crime and unemployment: a time-series analysis for Canada

We use national and regional Canadian data to analyse the relationship between economic activity (as reflected by the unemployment rate) and crime rates. Given potential aggregation bias, we disaggregate the crime data and look at the relationship between six different types of crimes rates and unemployment rate; we also disaggregate the data by region. We employ an error correction model in our analysis to test for short-run and long-run dynamics. We find no evidence of long-run relationship between crime and unemployment, when we look at both disaggregation by type of crime and disaggregation by region. Lack of evidence of a long-run relationship indicates we have no evidence of the motivation hypothesis. For selected types of property crimes, we find some evidence of a significant negative short-run relationship between crime and unemployment, lending support to the opportunity hypothesis. Inclusion of control variables in the panel analysis does not alter the findings, qualitatively or quantitatively.     

Natural gas,trade and sustainable growth: empirical evidence from the top gas consumers of the developing world

Natural gas is the key non-renewable source of energy for a low-carbon economy. The research applies heterogeneous panel techniques to investigate the impact of natural gas consumption on economic growth across a panel of top 15 natural gas consumers of the developing world. We establish long-run dynamics with cross-sectional dependence and heterogeneity across the sample countries. The long-run output elasticities suggest that the natural gas consumption and trade variables have significant positive effect on the output in a panel of developing economies. Further, we establish feedback relationship among gas consumption, output and trade in the short-run. Given the significance of natural gas as the low-emission source of energy, we suggest governments and policy advisers of these major natural gas consumers to focus on developing pipeline infrastructure for adequate supply, reforming natural gas sector with a competitive price structure to combat excess demand in individual natural gas market. With trade integration, majority of these countries need to incorporate these initiatives to improve the technologies such as combined cycle power plant technology and value-added chemical production technology to achieve sustainable economic growth.     

电力短缺、经济增长与政府规制

对国内电力供求形势由"九五"末期的供大干求向"十五"初期的供不应求变化的研究表明:政府长期电力规划应根据电力需求增长率与经济增长率关系而制定,以避免电力波动对长期经济增长的影响。因此,建议政府在电力规制过程中,应制定"电力先行"的经济增长战略,以实现电力供应安全对经济发展保障作用的目标。     

On the Stability of Long-Run M2 Demand in Japan

In this study we examine the stability of long-run broad money demand in Japan. In contrast to previous studies of Japanese broad money demand, we use a series of tests designed specifically to test for structural instability in the presence of I(1) processes. According to these tests, the Japanese broad money demand function appears to be stable over a period of financial innovation and deregulation.
JEL Classification Numbers: E41, C22.     

Subsidizing heterogeneous higher education systems

In many countries, there is an ongoing debate on the public funding of the higher education (HE) system. Our goal is to examine the theoretical justification for the establishment of HE institutions and analyze the self-selection of students under different policies of student subsidies. We study nonstationary equilibria of an overlapping-generation economy in a hierarchical education system. Given the capacity constraints of Universities, we explore the impact of adding new institutions, to be called Colleges, to the HE system, focusing on three issues. Given that Colleges are less productive and less selective than Universities: (a) Should the government establish Colleges? (b) Should the government divert funds from Universities to Colleges? On the basis of long-run economic growth considerations, we obtain positive answers to both questions. (c) Then, we compare several policies of student subsidies across the board. Our results suggest that much caution is needed in the implementation of student subsidies. Specifically, targeting subsidies to the highly-ranked students in each institution may distort their self-selection across institutions and downgrade the human capital accumulation in the economy. To offset this distortion in the demand for HE it may be useful to target subsidies to the low-ranked students in each institution. Our model also accounts for several stylized facts over time: (1) the increase in the number of institutions and students, (2) the decline in College admission standards, and (3) the decline in public budget per student and the corresponding increase in out-of-pocket student payments.     

Modelling Sustainable Consumption. From Theoretical Concepts to Policy Guidelines

Changes in consumption processes have been recognised as important steps towards sustainable development. The aim of this paper is to give an overview of research on sustainable consumption and to sketch new approaches in economic modelling ofsustainable consumption. A special focus is given to the relationship between stocks and flows as well as consumer services as being welfare relevant. From that three different steps of modelling are proposed, where the links between material goods demand and consumer services demand as well as the stock-flow relationship can be made explicit.