Does the political party in the government increase intentional homicide in Brazil?

This paper investigates the impacts of the Workers’ Party (WP ) in government on the homicide rate in Brazil from panel data for the Brazilian states between 1980 and 2011 using the system of generalized method of moments. An important explanatory factor in the homicide rate is the association between socioeconomic variables and left political parties in state governments. The results provide empirical evidence that the WP 's control of the government increased the homicide rate more than the other political parties. This suggests that increasing the number of years of WP occupation of the presidency leads to a more pronounced increase in the homicide rate, compared with other political parties. Although the observed trend indicates increased rates of homicide, more substantial growth was observed in almost all states under WP rule during the period 2003 to 2011, contributing to a higher overall level of violence in Brazil.     

Drug‐related violence and the decline in the number of Mexican cross‐border workers

This study examines how variations in homicide rates in Mexico are associated with the likelihood of participating in cross‐border work, that is, living in Mexico but working in the U.S. Based on Mexican census data from 2000, 2010, and 2015, and information on homicides, a series of ordinary least squares models are estimated to analyze the relationship between cross‐border commuting and homicide rates at the individual level. Fixed effects models are also estimated to study this relationship at the municipal level. The results show that from 2000 to 2010 the increase in homicide rates in northern border municipalities in Mexico reduced the likelihood of being a cross‐border worker, while from 2010 to 2015 the decrease in the homicide rate increased the probability that workers engage in cross‐border work. The decline in the number of cross‐border workers is likely in part a result of the escalation in drug‐related violence that may have led them to change their country of residence.     

Capital punishment and deterrence: a portfolio approach

Econometric studies of the deterrence effect of capital punishment have developed models of the supply of criminal homicides which include a variable to measure the probability of capital punishment. The present study, in contrast, employs a portfolio approach in which a model is developed realting changes in the rate of homicides across states to changes in the rate of a portfolio of all reported criminal offences. The effects of executions on changes in homicide rates are measured by changes in the nature of the relationship between homicide and the portfolio and abnormal variations in the residual of a model developed in the absence of executions. Using data from 1983–1988 across states and the District of Columbia, both the nature of the relationship and the residual variation are found to be uniquely altered in a manner consistent with the deterrence hypothesis. The results of the present study provide insight into why some studies of capital punishment may have failed to find appropriate disturbances in the rate of homicide. Disturbances may be observed only after accounting for changes in the crime portfolio. That is, those conditions that cause crime rates to rise in general may induce increases in the homicide rate that overwhelm the negative effect produced by executions.     

Sources of Fluctuations in the Real Exchange Rates and Trade Balances of the G‐7: A Sign Restriction VAR Approach

This paper estimates structural vector autoregression models of output, the real exchange rate and trade balance for the group of seven leading advanced economies (G‐7). Unlike previous studies, we do not impose long‐run purchasing power parity as an identifying assumption; instead, the shocks underlying the model are structurally identified using a set of theory‐consistent sign restrictions. Empirical results show that nominal shocks account for most of the long‐run variability in trade balances across the G‐7 countries. We are able to attribute this finding to long‐run movements in the real exchange rate, as the real exchange rate is significantly affected by nominal shocks in the long run.     

An investigation of the effects of exchange rate volatility on exports in East Asia

This study investigates the effects of the exchange rate volatility on the export flows of Indonesia, Malaysia, Republic of Korea, Singapore, Thailand, and the Philippines during 1974–2011. Towards this goal a trade weighted real effective (rather than the bilateral) exchange rate and three different measures of volatility, i.e. obtained from an ARCH model, a GARCH model and a moving-average standard deviation measure are used in this study. Specifically, the export flows between six Asian countries and the rest of the world are investigated rather than focusing on trade with only one country. Our findings reveal that the exchange rate volatility has a significant impact on export flows in the short run as well as in the long run for all the countries in the sample. The impact in the long run is predominantly negative with the exception of Singapore, but in the short run the impact varies across countries. Moreover, our results are robust to the alternative measures of volatility used and most of the findings in the long run and short run are also robust to the crisis period.     

The Malaysian Real Trade Balance and the Real Exchange Rate

The cointegration technique is used to examine the long‐run and short‐run relationships between the real Malaysian trade balance with the real exchange rate, domestic and world incomes. The results suggest that a real ringgit exchange rate depreciation improves the trade balance in the long run. World and domestic incomes are also found to be important determinants of trade balance. The significance of world income on trade balance indicates that Malaysia is prone to external shocks. An error‐correction model is then estimated to study the short‐run dynamics of the effects of exchange rate. The impulse response analysis shows that the effect of exchange rate on the trade balance lasts for about three years. A devaluation of ringgit will initially improve the trade balance, albeit small, after which the trade balance starts to deteriorate, and then improves again suggesting that there exists a delayed J‐curve.     

Monetary policy and exchange rate dynamics in the Spanish economy

As the Spanish economy gets more integrated in international markets, the real exchange rate becomes a key determinant of the monetary transmission. In this paper we trace out the dynamic response of prices, output and the exchange rate following a monetary policy shock. We estimate a structural VAR model whose identification scheme is based on the long run properties common to a large class of models. The results suggest that a small model with efficient asset markets plus nominal inertia and long run monetary neutrality, captures the essential features of the monetary transmission mechanism in Spain. The interest rate shock is well identified and the exchange rate overshoots its long run value. There are no signs of liquidity puzzle nor of price puzzle or exchange rate puzzle either.     

人民币升值对两岸经贸关系影响的实证研究

本文利用1999年7月至2008年4月的月度数据,运用协整检验以及基于VECM的Granger因果检验等计量方法,封人民币升值封两岸经贸关系的影响进行探讨。结果表明,人民币汇率与两岸经贸关系的三个核心指标都存在长期稳定的均衡关系。从长期来看,两岸经贸关系的三个核心指标都是人民币名义汇率的单向Granger原因;而从短期来看,不存在Granger因果关系。至于人民币升值封大陆封台出口、大陆自台进口以及台商对大陆投资的影响,无论是长期还是短期,都不明显。简言之,人民币升值封两岸经贸发展的负面影响不明显,而且从长远来看,两岸经贸关系的发展将有利于人民币汇率的稳定。     

Asymmetry Effects of Exchange Rate Changes on Domestic Production: Evidence from Nonlinear ARDL Approach

Currency depreciation is said to have positive or negative effects on domestic production. Previous studies that tried to address this issue using Australian data have been inconclusive at best but mostly showed no effects. One common feature of all studies is that they have assumed that the effects of exchange rate changes are symmetric. In this paper, we use the concept of partial sum and separate appreciations from depreciations to test whether the effects are symmetric or asymmetric. Application of the nonlinear ARDL approach of Shin et al. (2014) reveals that indeed the effects of changes in the real effective exchange rate of the Australian dollar are asymmetric in the short run as well as in the long run. While in the short run both appreciations and depreciations affect Australian domestic production, only effects of appreciation last into the long run, a unique finding.     

Does economic freedom really kill? On the association between ‘Neoliberal’ policies and homicide rates

This paper investigates recent claims that ‘neoliberal’ policies and reforms are associated with higher homicide rates and other types of crime. Using a panel of the 50 US states observed between 1981 and 2011 and the Economic Freedom Index of the Fraser Institute, results show that there is no direct association between changes in economic policies as measured by this index and homicide rates. The results nevertheless show that other non-violent types of crime decrease with spending or tax policy.     

Remittances and the Dutch disease: evidence from Georgia

In this article, using the VECM model we attempt to empirically examine the Dutch disease effect of remittances in Georgia. The analyses are based on quarterly data covering the years 2000–2016. It is found that an inflow of remittances leads to an appreciation of the real effective exchange rate in the long run, whereas it has the reverse effect in the short run.     

The relative effects of crude oil price and exchange rate on petroleum product prices: Evidence from a set of Northern Mediterranean countries

This paper provides a set of empirical evidence from five Northern Mediterranean countries that are subject to similar refinery reference prices regarding the relative sensitivity of crude oil prices and exchange rate on (pre-tax) petroleum product prices. The empirical evidence reveals that a one percent increase in exchange rate (depreciation) increases petroleum product prices less than a one percent increase in crude oil prices does in the long run. In the short run, however, a one percent increase in exchange rate increases petroleum product prices more than a one percent increase in crude oil prices does.     

Monetary Cooperation in Europe and the Problem of Differential Productivity Growth: an argument for a ‘two-speed’ Europe

Cointegration analysis of a productivity-modified purchasing power parity relation supports the hypothesis that—in the long run—the nominal exchange rate adjusts to accommodate different national rates of productivity growth in the traded goods sector. Accordingly, in the long run, an absence of exchange rate flexibility combined with productivity growth differentials is likely to generate an intractable adjustment problem. Because Germany and France display a similar evolution of productivity, this analysis supports their participation in monetary union, whereas a markedly different pattern of productivity growth in the UK constitutes an argument against membership. In passing, we find empirical support for Michael Porter's hypothesis that continuous devaluation can reduce the rate of productivity growth. This also has implications for UK membership.     

THE J CURVE: CHINA VERSUS HER TRADING PARTNERS

The short‐run effects of currency depreciation are said to be different from its long‐run effects. In the short run, the trade balance deteriorates and improvement comes after some time; hence, the J‐curve phenomenon. Previous studies that tested the response of the trade balance to exchange rate changes in China employed aggregate trade data and provided mixed results. Indeed, most of them concluded that real depreciation has no long‐run impact on the Chinese trade balance. In this paper, we disaggregate the data by country and using recent advances in time series modelling estimate a trade balance model between China and her 13 major trading partners. We show that real depreciation of the Chinese currency has a favourable impact on her trade balance with a few partners, especially the USA. Not much support is found for the J‐curve hypothesis.     

Kaleckian Effective Demand and Sraffian Normal Prices: Towards a reconciliation

Sraffians and Kaleckians alike reject the belief that higher rates of accumulation need be associated with lower real wage rates or higher propensities to save. The rejection of this proposition is mainly based on the endogeneity of the rate of capacity utilization, both in the short and the long run. This endogeneity often relies on a discrepancy between the realized and the normal rates of profit, or between the realized and the target rate of capacity utilization, a discrepancy which some authors believe is unwarranted in long run analysis. Various models that eliminate this divergence are outlined. In all these models, the normal rate of profit itself is taken as an endogenous variable. In the first two models, the normal rate of profit depends either on the realized profit rate or the rate of interest. Supply-led results may then reappear in long run analysis. In the last model, one introduces the possibility of a divergence between the rate of return as assessed and targeted by firms, and the rate of return that is actually incorporated into prices. This divergence arises because of the bargaining power of workers and their real wage resistance. Under these conditions, the demand-led results of the Kaleckian tradition are recovered in a model with definite solutions.     

Bank Interest Rate Adjustments: Are They Asymmetric?

This paper is concerned with the asymmetric adjustments between three Australian bank interest rates: a bank bill rate, a loan rate and a deposit rate. A multivariate asymmetric error-correction model is applied to capture the interplay of long-run relationships between the levels of the rates and short-run relationships between the changes in the rates. The empirical analysis, for the sample period 1990:01–2000:04, shows that interest rate adjustments, in response to positive and negative shocks, are asymmetric in the short run, but not in the long run. In particular, the results suggest that banks adjust their loan and deposit rates, in response to a change in the bank-bill rate, at a faster rate during periods of monetary easings (negative changes) than during periods of monetary tightenings (positive changes).     

Revisiting the exchange rate disconnect puzzle

One of the major anomalies in International Macroeconomics is the persistent finding that the exchange rate has no empirical relationship with a variety of macroeconomic fundamentals. Dubbed the ‘exchange rate disconnect puzzle’, this article examines this issue for five Australian dollar bilateral exchange rates, using quarterly data for the period 1984:1–2015:4. A novel feature of this article is that it departs from the extant literature by using a different approach to testing for cointegration. The results show that the exchange rates and fundamentals move together in the long run. Furthermore, the results show that fundamentals Granger cause exchange rates, both in the short run and the long run.     

Interest linkages between the US,UK and German interest rates: should the UK join the European Monetary Union?

In light of continuing mixed results in the literature, this paper re‐examines the German Dominance Hypothesis (GDH) and considers whether the UK should join the Eurozone. For this purpose, short‐term interest rate relationships between the UK, Germany, the Eurozone and the USA, for the period January 1982 to June 2007, are studied. The policy implication of a loss of monetary autonomy for the UK in favour of Germany or the European Central Bank (ECB) would give support to the UK joining the EMU as an economic response. From the early 1980s the Bundesbank’s responsibility was to use money growth targets to keep average inflation rate down in the long run. This long run objective suggests that an appropriate methodology for testing the GDH is to test whether the German stochastic trend is a driving stochastic trend. In other words we determine whether a permanent shock to the German interest rate has a permanent effect on the UK interest rate. To this end the structural shocks in a VECM are identified by imposing long‐run restrictions of the type developed in King et al. (1991). We apply the same techniques to testing whether the UK has suffered a loss of monetary autonomy in favour of the ECB.     

State Taxation of the Iron Ore Industry in Western Australia

As a contribution to the debate over the taxation of the extractive industries, this article provides estimates of the short run and long run price elasticities of supply for iron ore in Western Australia. Using these estimates, an increase of 1 per cent in the average royalty rate on iron ore is shown to result in a short run decline of 0.61 per cent in the output of iron ore, and a long run decline of 4.36 per cent. It is concluded that raising tax revenue by ad valorem royalties on iron ore leads to a substantial distortion of output, especially after accounting for indirect effects.     

The demand for money in an open economy: the United Kingdom

Most previous studies have estimated the demand for money without paying too much attention to developments in the foreign exchange markets. In light of the fact that any development abroad and in the foreign exchange markets could have implications for domestic stabilization, we make an attempt to incorporate such developments into the demand for money in the United Kingdom. More precisely, after incorporating a measure of real effective exchange rate of the British Pound into a dynamic money demand function, we estimated it for the UK using quarterly data over 1973–87 period. By relying upon the Akaike' Final Prediction Error criteria to select the optimum number of lags, it is shown that in addition to income and interest rate, the real effective exchange rate exerts significant effect on the UK demand for money in the short run as well as long run.