Revisiting purchasing power parity in Latin America: sequential panel selection method

This study applies the Sequential Panel Selection Method (SPSM), proposed by Chortareas and Kapetanios (2009) to test the validity of long-run purchasing power parity (PPP) in a sample of 15 Latin American countries using monthly data spanning from December 1994 to February 2010. SPSM classifies the whole panel into a group of stationary and nonstationary series. In doing so, we can clearly identify how many and which series in the panel are stationary processes. Empirical results from the SPSM using the Panel KSS unit root test (Ucar and Omay, 2009) with a Fourier function which accounts for any structural break in the data indicate that PPP holds in many of the Latin American countries studied.     

Understanding political−economic development in the American South

We propose an empirical strategy to adjudicate between competing explanations of political–economic development in the American South. This strategy evaluates the dynamic relationship between partisan control of representative institutions and economic performance, both before and after major partisan realignment forces and economic conditions had structurally transformed the American South. The political–economic development of low‐capacity Southern states since the early 1980s reflects a “virtuous cycle” of rising income growth and partisan balance of state legislatures mutually reinforcing one another. These findings reconcile conflicting claims regarding the catalytic nature of political–economic development coevolution in the American South and have broader implications for the study of comparative political–economic development.     

Pursuing efficiency: a data envelopment analysis of MFIs in Latin America

This article analyses the overall profitability efficiency (PE) of Microfinance Institutions (MFIs) in Latin America. The PE of each MFI in the study is broken down into two components: pure technical efficiency and scale efficiency. One data envelopment model is used to analyse each component. Each MFI was labelled as either a bank, cooperative and credit union, nonbanking financial institution or non-governmental organization, and then the analysis was performed on each separate group. The results suggest that, on average, banks are the most efficient MFIs; while NGOs are, on average, the least efficient MFIs. On average, all 4 groups are more pure technically efficient than scale efficient. Banks, nongovernmental organizations, nonbanking financial institutions, cooperatives and credit unions all seem to have problems with scale efficiency. Many MFIs seem to be operating on the increasing returns to scale frontier and are in a more favourable position for expansion.     

Macroeconomic determinants of bank spread in Latin America: a recent analysis with special focus on Brazil

Latin America has one of the highest interest margins in the world; furthermore, credit to private sector and bank spread are negatively correlated. Brazil, in particular, has one the highest bank spreads in the world – it is even so far the highest one among the Latin American economies. Indeed, despite of the decline in interest rates since mid‐1999, bank spread in Brazil continues to be extremely high in international terms, and in recent years has stood at around 40 percentage points. This paper intends to explore the discussion in the recent literature on bank spread about what determines bank spread in Latin America, with special focus on the Brazilian case, seeking in particular but not exclusively to analyze the macroeconomic determinants of bank spread in recent times.     

An empirical analysis of the relationship between economic development and population growth in China

China has experienced a dramatic demographic transition since the latter half of the twentieth century, and thus, assessing the global economic implications is an important issue. This article uses time-series data on China to estimate the determinants of gross domestic product (GDP) per capita. According to the results of the presented co-integration analysis, population has a significantly negative impact on GDP per capita, while savings rate, total factor productivity and degree of industrialization have significantly positive impacts on GDP per capita. These results suggest that the share of the working-age population relative to the total population does not have a strong influence on GDP per capita. Therefore, the contribution of the working-age population to economic growth might not be as large as previously assumed. It is also possible that an increase in savings, remarkable industrialization and rapid technological progress have all stimulated economic growth in China greatly.     

Schumpeterian process competition, welfare and laissez-faire: An experiment in artificial economic evolution

A simulation model is used to construct a regime of artificial economic evolution, where Schumpeterian process competition prevails, in the presence of technological uncertainty and bounded rationality. The output decision of the firm is represented by a behavioural algorithm, which allows for the presence of collusive behaviour. The purpose of the experiments is to go some way towards addressing the twin issues of the nature of the relationship between market structure and industry performance in a dynamic setting, and the contention that the evolutionary metaphor implies a laissez-faire stance with respect to policy issues. Under the simplifying assumptions of the model, experiments suggest that industries which generate high average concentration over a given period can compare favourably with industries that generate low average concentration, if the time profiles of both welfare and concentration are analysed. Also, the experiments suggest that the industry will naturally evolve a structure best suited to exploit the technological environment, but despite this there is still a role for intervention into the competitive process.     

Financial development and economic growth in Greece: an empirical investigation with Granger causality analysis

This paper empirically examines the causal relationship between the degree of openness of the economy, financial development and economic growth by using a multivariate autoregressive VAR model in Greece for the examined period 1960:I-2000:IV. The results of cointegration analysis suggest that there is one cointegrated vector among GDP, financial development and the degree of openness of the economy. Granger causality tests based on error correction models show that there is a causal relationship between financial development and economic growth, but also between the degree of openness of the economy and economic growth.     

The effect of NAFTA on internal migration in Mexico: a regional economic analysis

Trade facilitates growth in some regions of a country while shrinking others, and therefore to benefit from trade, labour may need to be able to migrate. This mobility is particularly crucial in a developing country with high income inequality like Mexico. We seek to answer the following questions: What characteristics facilitate or hinder that internal migration? Has trade liberalization changed the pattern of internal migration in Mexico? We first predict regional economic growth resulting from changes in Mexico-US tariffs by sector. We find that trade liberalization appears to have largely benefited the manufacturing sector. Next, using a spatial gravity model of migration, we find that while economic growth from trade openness drew workers to urban regions in the northern Border States of Mexico, much of the trade-driven migration occurred before NAFTA. Second, contrary to popular belief, migration from largely rural states appears to have decreased since NAFTA. We also find evidence that migration to the United States increased after NAFTA. Last, we find that income disparity in both the destination and origin region deters migration and that this effect increases after NAFTA. Thus, we see evidence that within-region income disparity can hinder migration, potentially exacerbating income disparity among regions.     

Different Impacts of Scientific and Technological Knowledge on Economic Growth: Contrasting Science and Technology Policy in East Asia and Latin America

This paper conducts country‐panel econometric analysis with a focus on the different roles of scientific and technological knowledge on economic growth and on the knowledge production functions. It finds that it is not scientific knowledge (academic articles) but technological knowledge (patents) that matters for economic growth, and that generating scientific knowledge does not automatically lead to the generation of technological knowledge. We find that technological knowledge is primarily determined by corporate research and development efforts, which used to be more lacking in Latin American countries, compared with East Asia. This finding sheds new light on the question of why Latin American and East Asian countries have shown such divergent economic performances.     

Financial development and economic growth in Australia: An empirical analysis

The paper empirically examines the dynamic relationship between financial development and economic growth in Australia in terms of bank-based and market-based financial structure. A time-series approach using the VAR Model is used to provide evidence for the dynamic relationship. The paper provides empirical evidence on the causal impact of the financial market on the economic growth of the Australian economy. The results suggest that financial intermediaries and financial markets have different impacts on economic growth given their diverse roles in the domestic economy. In particular there is evidence of causality from economic growth to the development of the financial intermediaries. On the other hand, development in the financial markets causes economic growth but there is no evidence of any causality from economic growth to financial markets. The sensitivity test using different interest rates does not change the results.I Jel classification: O16, G18, G28I We would like to thank Tilak Abeysinghe and Rajagurn Gunasekaran for their helpful comments on the first draft. Also, we would like to thank the Editor, Prof. Baldev Raj, and two anonymous referees for their helpful comments.First version received: October 2001/Final version received: October 2002     

中国西部地区的能源开发与经济增长——基于"资源诅咒"假说的实证分析

Based on resource curse hypothesis, this paper carries out an econometric analysis on the relationship and its transmission mechanism between energy exploitation and economic growth with cross-province panel data over 1991–2006. Results reveal that there is the significantly negative correlation between energy exploitation and economic growth, which indicates since the 1990s, the resource curse effect from energy exploitation has appeared evidently; though, before the implementation of the Western development strategy, energy exploitation acted negatively on opening degree, S&T innovation and human capital input, the effect was yet uncreated. However, after the implementation of the strategy, the effect emerged evidently as a result of the enhanced negative effect of energy exploitation on S&T innovation and human capital input. Moreover, further tests indicate that energy exploitation impeded economic growth mainly through three indirect transmission channels: The crowding-out effect towards human capital input and S&T innovation, and the weakening of institution aroused by rent-seeking and corruption. And among them, human capital input is the strongest transmission factor. __________ Translated from Jingji yanjiu 经济研究 (Economic Research Journal), 2008, (4): 147–160     

县域经济在国民经济中的现实地位变迁:理论与实证

明确县域经济在国民经济中的地位是研究县域经济发展问题的基础性课题。已有的研究文献未能区分县域经济的理论地位和现实地位,且多以县域经济自身的重要性论证县域经济的地位,不尽合乎研究规范,因而说服力不强。文章按规范要求采用比较分析范式研究了县域经济在我国国民经济中的现实地位及其变迁,认为:国家经济发展战略从垂直和水平两个方向给定了县域经济相对于其他行政性区域经济体在一国国民经济中的现实地位,且改革开放后,我国经济发展战略的调整降低了我国县域经济的现实地位。1988年至2002年的实证观察证实了文章的这一基本判断。这将为全面讨论县域经济发展问题提供理论基础。