Impact of oil price changes on Turkey’s exports

Substantial decline in oil prices observed since the second half of 2014 has brought forward discussions on the impact of oil prices on the external balance. This decline is expected to shift real income from oil exporter countries to oil importer countries. In this context, we study the effect of change in oil prices on Turkey’s exports taking into account the fact that Turkey’s export to oil exporting countries has approximately one-third share in total exports, while export to oil importing countries has a share of two-thirds. At the first step, we analyse the effect of oil prices on economic growth of trade partners of Turkey, where countries are grouped according to their net oil export position. We find that the effect of oil prices on different country groups’ growth is asymmetric. In the second stage, for two groups of countries, we estimate growth-export elasticity through Turkey’s export demand function. Finally, we calculate the net effect of oil prices on exports considering different income effects caused by oil price change on each country groups. Results indicate that the net effect of oil prices on the exports is limited given the current export shares.     

贫富差距、供求弹性与房价*

近些年，中国的贫富差距和房价居高不下，但现有文献忽视供求弹性与贫富差距交互作用对房价的影响。据此，本文构建结合贫富差距和供求弹性的住房存量调整模型，使用中国2002—2012年7省份33个城市的UHS数据发现，收入和财富的基尼系数对房价有正影响；供求弹性对房价分别有负影响和正影响；收入和财富基尼系数与供求弹性交互项对房价分别有正影响和负影响。据此，为防止房价泡沫，各级政府一方面应缩小贫富差距，另一方面应增加土地和住房供给。     

ESTIMATING IMPORT AND EXPORT DEMAND ELASTICITIES FOR MAURITIUS AND SOUTH AFRICA

In this paper, we re‐estimate the import and the export demand functions for Mauritius and South Africa using time series data. We use the bounds tests for cointegration and find evidence of a long‐run relationship between import demand, income and prices for both countries. Our long run elasticities reveal that domestic income and relative prices have significant effects on the import demand for both countries, with income being the most important determinant. Furthermore, we find that while South Africa's export demand is not responsive to relative prices or income; for Mauritius income is statistically significant.     

Housing Prices in Urban China as Determined by Demand and Supply

This paper studies the demand for and supply of residential housing in urban China since the late 1980s when the urban housing market became commercialized. Using aggregated annual data from 1987 to 2012 in a simultaneous equations framework we show that the rapid increase in the urban residential housing price can be well explained by the forces of demand and supply, with income determining demand and cost of construction affecting supply. We find the income elasticity of demand for urban housing to be approximately 1, the price elasticity of demand to be approximately ?1.1 and the price elasticity of supply of the total housing stock to be approximately 0.5. The resulting long‐run effect of income on urban housing prices in elasticity terms is approximately 0.7, because the increase in income has shifted the demand curve outward more rapidly than the supply curve.     

Air Pollution and ‘Dirty’ Industries: How and Why Does the Composition of Manufacturing Output Change with Economic Development?

This paper examines the impact on air pollution ofchanges in the composition of manufacturing output indeveloped and developing countries. Pollutionemissions from manufacturing output are estimated ina manner which holds constant the effect of technologyand regulations allowing the impact of compositional changes alone on pollution to beestimated. The paper has three main findings; (1) theinverted-U estimated between per capita income and thepollution intensity of GDP arises due to both thecomposition of manufacturing becoming cleaner and theshare of manufacturing output in GDP falling.Compositional changes alone are not responsible forthe inverted-U between per capita income and percapita emissions; (2) changes to the composition ofmanufacturing output are consistent with the pollutionhaven hypothesis, however there is clear evidence thatrising per capita incomes are associated with afalling income elasticity of demand for `dirty'products. This fact may explain the compositionalchanges that occur with development; (3) in additionto the income elasticity effect, the analysis suggeststhat land prices and to a lesser extent the prices oflabour and capital, determine the proportion of dirtyindustry within a country's manufacturing sector.     

Money demand income elasticity in advanced and developing countries: new evidence from meta-analysis

This article extends the meta-analysis presented in Knell and Stix (2005, 2006) to investigate the possible sources of variations in empirical findings about the income elasticity of money demand in advanced and developing countries. In the case of advanced countries, we find that the income elasticities of money demand are significantly higher if broader definitions of the monetary aggregates are used. In addition, financial reforms and wealth seem to have significantly reduced the estimates of the income elasticity. However, we achieved quite different findings for the developing countries. It appears that the broader definitions of monetary aggregates seem to produce income elasticity estimates that are only marginally higher than the narrower aggregates. While the wealth (financial reform) impacts on income elasticity are statistically insignificant (weakly significant), both seems to have reduced the income elasticity estimates only marginally. Moreover, some contrasting results between advanced and developing countries are also attained with respect to the proxies of cost of holding money.     

Decomposing the determinants of road traffic demand

This study presents a decomposition of the basic fundamental determinants of road traffic and fuel demand. A general framework is proposed as a means of analysing the impacts of changes in prices and income on the demand for fuel and traffic volume. The objective is to provide a general basis for comparing different road traffic elasticity estimates and for understanding how a variety of different factors work together to create overall road traffic and fuel demand responses. The study emphasizes relationships between different price and income elasticity measures and uses estimates from the literature to evaluate the main determinants of demand including some previously unobserved effects.     

Relative prices and the demand for money

This paper examines the validity of the conventional specification of money demand with particular reference to the issue of relative prices. It is shown that the conventional money demand function is based on the assumption of weak separability of money from commodities, which forms the basis for the absence of relative prices in money demand. Empirical and presumptive evidence suggests that weak separability is not tenable, implying that relative prices are important in money demand. The inclusion of commodity prices in money demand significantly affects the interest and income elasticity estimates. Finally, it is noted that the aggregate consumption function excluding commodity prices also has no theoretical and empirical base.     

Long-run money demand in OECD countries: what role do common factors play?

This article examines the long-run money demand function for 11 OECD countries from 1983Q1 to 2006Q4 using panel data. The distinction between common factors and idiosyncratic components using principal component analysis allows for the detection of cross-member cointegration and the determination as to whether national or international sources are responsible for the non-stationarity of money and its determinants. Indeed, the finding that the common factors are I(1) while the idiosyncratic components are I(0) indicates that cross-member cointegration may exist and non-stationarity in the variables is primarily driven by common international trends. Furthermore, it is found that the impact of income on money demand is positive, whereas it is negative for the interest rate, exchange rate and stock prices. Except for the income elasticity of money demand, all estimated long-run coefficients are larger for the common factors of the variables than for the variables themselves. This article provides evidence that the exchange rate is an important determinant of money demand, whereas the results for the stock prices are ambiguous. Finally, the results of a panel-based error-correction model suggest that several domestic money stocks converge to a common international equilibrium relationship between the common factors.     

Estimating an Import Demand Function in Developing Countries: A Structural Econometric Approach with Applications to India and Sri Lanka

Owing to the unavailability of time‐series data on the domestic market‐clearing price of imports, the estimation of notional price and income elasticities of aggregate import demand remains a daunting task for a large number of developing countries. This paper develops a structural econometric model of a two‐goods representative agent economy that incorporates a binding foreign exchange constraint at the administered prices of imports. A theoretically consistent parameterization of the “virtual relative price” of imports circumvents the data problem, and thus enables the estimation of income and price responses by cointegration approach. The price and income elasticity estimates for India and Sri Lanka, in contrast to the extant literature, have correct signs, high statistical significance, and plausible magnitudes.     

Empirical regularities in South African consumption patterns

This article investigates a number of empirical regularities in the South African consumption patterns. The data support the following empirical regularities: (1) variability in consumption systematically exceeds the variability in prices; (2) law of demand; (3) income flexibility is about ?0.5; (4) Engel's law; and (5) the demand hypotheses, demand homogeneity and Slutsky symmetry are acceptable. In contrast to the findings for a number of other countries, another important empirical regularity that consumer's utility function is additive is rejected for the South African consumers. Based on the implied demand elasticity estimates from the preferred model, it is found that food, housing and medical care are necessities, and clothing, furniture, transport and recreation are luxuries and demand for all the commodities are price inelastic.     

Income inequality and export prices across countries

This paper provides theory and evidence on the links between income inequality within a destination country and the patterns of trade and export prices. The theoretical framework relates income inequality to product quality and prices using a simple demand composition effect. The model predicts that a more unequal income distribution in a destination country leads to higher average prices, though the effect is nonlinear and disappears for rich enough countries. The predictions are tested using detailed firm‐level data. Controlling for income per capita, prices are systematically higher in more unequal destinations, and the strength of this effect depends on income per capita. Results are particularly important for middle‐income countries and hold only for differentiated goods, and in particular for products with a high degree of vertical differentiation.     

The impacts of China on economic growth: Evidence for Brazil,Chile, and Peru

This study empirically analyzes the direct impacts derived from the swift increase in exports to China (referred to as “the impact of China”) on the economic growth of three selected South American countries, Brazil, Chile, and Peru, during the commodity boom between 2001 and 2008. The results stemming from the balance-of-payments-constrained growth model suggest that the magnitude of China’s impact was less than 1 percent, although it ranged from the largest to the second largest impact among all trading partners for the three countries. The estimated balance-of-payments growth rate of domestic income is lower than the real growth rate of domestic income. This is because the growth rates of the export volumes were not sufficient even during the commodity boom, on account of the continued increasing trends of income elasticity of demand for imports. Furthermore, the income elasticities of demand for imports from China were especially high. Therefore, the three countries will continue to face further increase in the income elasticity of demand for imports as well as a stagnant growth rate of export volumes. Thus, the balance-of-payments position will continue to be the main growth constraint for these countries.     

Determinants of residential water demand in Germany

We econometrically analyze the impact of several economic, environmental and social determinants for the per capita demand for water in about 600 water supply areas in Germany. Besides prices, income and household size, we consider the effects of population age, the share of wells, housing patterns, precipitation and temperature. We also explore why current per capita residential water consumption in the new federal states is about 30% lower than in the old federal states. Since average cost pricing may cause an endogeneity problem, we apply instrumental-variable procedures in addition to single equation ordinary least squares, but find no evidence that prices are endogenous. Our estimation results suggest that the price elasticity of water demand in Germany is around − 0.24. The income elasticity is positive, decreases with higher income levels and is at least three times higher in the new federal states than in the old federal states. Current differences in prices and income levels explain about one third of the gap in residential water use between the two regions. Household size and the share of wells have a negative impact on per capita water demand, and water use increases with age. Finally, the findings provide some evidence that rainfall patterns rather than total rainfall affect water consumption, while temperature appears to have no impact at all. All outcomes are robust to a log-log and two types of semi-log specifications for the water demand function.     

Bilateral and regional trade elasticities of the EU

The traditional way of assessing the impact of currency depreciation and income on the trade balance has been to estimate the elasticity of trade volume to relative prices and income. The previous studies examine the problems associated with using aggregate data. The recent studies rely on bilateral data, yet another problem is that data for export and import prices are not available. Thus, this study proposes an alternative way of assessing the impact of currency depreciation by using the real exchange rate and the impact of income on bilateral trade. The models are applied between the EU and its major trading partners. Furthermore, the analysis includes the six major trading regions along side the eight major trading countries for 1980–2007, on the quarterly basis. This article uses the autoregressive distributive lag (ARDL) approach advocated by Pesaran and Pesaran (1997). Our results indicate a higher importance of income compared to the real exchange rate in defined bilateral export and import demand functions. In addition, the applied CUSUM and CUSUMSQ stability tests confirm the stability of estimated coefficients in most cases.     

Demand for ground transportation fuels in 10 Asian countries: An application of the autoregressive distributed lag bounds testing approach

This study applies the recently developed autoregressive distributed lag bounds testing approach to investigate demands for gasoline and diesel in the ground transportation sectors of 10 Asian countries from 1983 to 2013. Results reveal an inelastic fuel demand with respect to price, except in Hong Kong. This relation implies that the government is unable to limit fuel consumption by controlling price. Moreover, fuel demand with respect to income is generally greater than price elasticity. In other words, if the growth of the national income is faster than that of fuel price, fuel consumption will continually increase. Long‐term income elasticity is greater than unity in half of the examined countries. The demand for transportation fuel in these countries is expected to grow at a rate faster than the growth of GDP over a wide range of economies in Asia, with the implication that the concern regarding the scarcity of fossil fuel is not misplaced.     

Universal telecommunication service: A world perspective

Worldwide telecommunications demand is estimated in models for business and residential mainline telephone, and for mobile telephone service using separate models for developed and developing countries for the period 1996–2001. We test for cross-price elasticities between mainline and mobile service and find that the results are generally suggestive of current complementary relationships. We find residential monthly price elasticity to be no different than zero for a sample of developing countries, but the connection elasticity is statistically significant. Mobile monthly service elasticity is much larger than those for mainline service, suggesting that universal service in developing countries might be promoted more effectively with subsidies for mobile service. Income elasticities for the residential model are modest while the mobile service model income elasticity for developing countries is much higher. Expanding markets, income growth and enhanced education may be the ultimate universal service promoters.     

美国需求端产业结构的变化及对中国的启示

对产业结构演化的研究都是从供给端计算的产业结构,本文构造了从需求端计算的产业结构并依此对美国需求端产业结构的演化进行了实证分析。研究表明,当年价所计算的美国需求端三次产业结构的变化小于供给端产业结构的变化;1970年以来美国第二产业的变化差异中近40%可以用外贸因素来解释。进而本文采取不变价计算了美国产业结构的变化,研究表明,自1970年以来按不变价计算的美国需求端的产业结构变化很小,且美国第三产业比例提升中有31%可以用不同产业价格因素变化来解释,44%可以用国际贸易来解释,仅有25%可以用第三产业收入弹性的变化来解释,因而收入弹性不是美国第三产业比例提升的重要原因。美国能够维持经常账户的逆差,将第三产业作为动力产业的根本原因在于美元的霸权地位。相比较而言,中国一直以来处于国际收支“双顺差”的状态,中国的具体国情和国家实力均无法满足大规模输出人民币使之成为其他国家储备货币的条件。     

A divisia version of the country-product-dummy method

A Divisia version of the country-product-dummy method of Kravis et al. is obtained and extended to include income as an explanatory variable. Income elasticities of relative prices for eight goods across 15 countries are obtained and compared with the income elasticities of the demand for these goods.