Public budgetary rules and GDP growth: An empirical study on OECD and twelve european countries

We study the long-term effects of budgetary rules on GDP growth rate and analyse the determinants of the short-term GDP growth dynamics. For both a sample of 19 OECD and a subsample of 12 European countries, we show that, in the long run, improvements in the cyclically adjusted budget balance, as well as increases in the tax burden, have negative effects on GDP growth. The highest effect of fiscal policy on GDP growth would be obtained if the structural deficits were used to increase the market size by reducing the tax burden. In line with Barro (1990), a deficit-financed reduction of tax burden has a stronger effect for European than for OECD countries, because in Europe the government size with respect to market size is too large. Therefore, if GDP growth is a dominant policy objective, in Europe specific actions should redress the 2012 Treaty toward a reduction of the tax burden.     

Determinants of exchange-rate regimes for currencies of developing countries: Some preliminary results

The breakdown of the Bretton Woods system gave the LDCs an opportunity to move away from exchange-rate regimes based on pegging to a single currency. Relatively few chose to do so, thus providing some evidence that, from their point of view, the recognized advantages of more flexible exchange-rate arrangements are more than outweighed by the recognized drawbacks.The aim of this article is to set up a suitable econometric model and use it for a preliminary assessment of the quantitative significance of various factors affecting the choice of exchange-rate regimes by the LDCs.     

Some theoretical and empirical issues relating to economic stabilization in developing countries

This paper surveys some issues relating to economic stabilization in developing countries. Section 2 examines the contributions of terms-of-trade deterioration and real exchange rate appreciation to payments imbalances in non-oil developing countries during the 1970s. Section 3 distinguishes between demand-side and supply-side policies, and discusses their respective roles in stabilization programmes. The effects of exchange-rate changes are considered within this framework. In Section 4, the effects of alternative stabilization policies on output, prices and the balance of payments are illustrated using simulations of a model that incorporates the major relationships relevant to a typical programme. Section 5 summarizes the conclusions.     

Trade and convergence between rich and developing countries: Some empirical evidence on macrodeterminants of specialization

Trade and Convergence Between Rich and Developing Countries: Some Empirical Evidence on Macrodeterminants of Specialization. —A case study is proposed considering trade of Italy with many groups of partners belonging to the EU, to the G-7, to the newly industrializing countries and to the newly exporting countries. Using panel estimation data, they reach the conclusion that standard of living convergence does not favour intraindustry trade among rich countries but it is IIT-biased when considering emerging countries like the NICs. A much more important role is played by country-relative size and price differentials and/or vertical differentiation.     

Labor market deregulation and globalization: empirical evidence from OECD countries

This paper empirically investigates the influence of globalization on various aspects of labor market deregulation. I employ the data set by Bassanini and Duval (2006) on labor market institutions in OECD countries and the KOF index of globalization. The data set covers 20 OECD countries in the 1982–2003 period. The results suggest that globalization did neither influence the unemployment replacement rate, the unemployment benefit length, public expenditures on ALMP, the tax wedge, union density nor overall employment protection. In contrast, protection of regular employment contracts was diminished when globalization was proceeding rapidly. In fact, domestic aspects, such as unemployment and government ideology are more important determinants of labor market institutions and deregulation processes in OECD countries than globalization. For this reason, working conditions of unskilled workers are not likely to deteriorate and the jobs of unskilled workers are not likely to disappear in the course of globalization. All this is, of course, not to insinuate that globalization has any benign influence on labor market institutions.     

Immigration and the public transfer system: Some empirical evidence for Switzerland

Immigration and the Public Transfer System: Some Empirical Evidence for Switzerland. —The paper deals with the distributional effects of immigration into Switzerland. The cross-section analysis for 1990 shows that the presence of resident foreigners has not put additional strain on the public purse. On the contrary, there was a favourable financial effect for the native population. The analysis reveals how important the age and qualification of the household head and the number of children in the household are. By including both monetary and real public transfer payments a compre-hensive account of the budget effects of immigration is given.     

The short-run demand for money in germany: Some caveats for empirical work

Zusammenfassung Die kurzfristige Geldnachfrage in Deutschland : Einige Warnungen für die empirische Arbeit. -Dieser Aufsatz liefert einige Evidenz für die Hypothese, da? der übliche Ansatz mit partieller Anpassung ein unzureichendes Verfahren ist, um eine Strukturgleichung für die Geldnachfrage in den siebziger Jahren zu sch?tzen. Die Hypothese wird best?tigt, indem die konventionellen Gleichungen für die sechziger und siebziger Jahre getrennt gesch?tzt werden, wobei für die beiden Zeitr?ume ein unterschiedliches W?hrungssystem angenommen wird. 1973 erfolgt der übergang von fixen zu flexiblen Wechselkursen, und au?erdem breitet sich die monetaristische Lehre unter den Zentralbanken aus mit einem entsprechenden Wechsel von der Preiszur Mengenregulierung. Die Regressionsergebnisse für die beiden Teilzeitr?ume differieren tats?chlich erheblich ebenso wie die Ergebnisse von Vektor-Autoregressionen und eines Versuchs, Innovationen zu berücksichtigen, wobei wiederum die zwei W?hrungssysteme zugrunde gelegt wurden.

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Résumé La demande de la monnaie à court terme pour l'Allemagne: Quelques avertissements pour le travail empirique. -Cet article démontre quelque évidence pour l'hypothèse que l'approche conventionelle d'ajustement partiel est une procédure inadéquate pour estimer l'équation structurelle pour la demande de la monnaie dans les années soixante-dix.V hypothèse est affirmée par l'estimation des équations conventionnelles, séparément pour les années soixante et soixante-dix, pour lesquelles on peut supposer un changement du régime monétaire. Il y avait un changement d'un système de taux de change fixe à un système de taux de change flexible en 1973 et la propagation de la philosophie monétariste parmi les banques centrales de suivre une règle de quantité au lieu d'une règle de prix. Les résultats de régression pour les deux sous-échantillons en effet diffèrent considérablement aussi bien que les résultats d'autoregression de vecteur et l'exercice considérant l'innovation que l'auteur faisait encore une fois pour les deux régimes.

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Resumen La demanda de dinero a corto plazo en Alemania: algunos problemas empfricos. -Este trabajo presenta evidencia empírica en favor de la hipótesis de que el método convencional de ajuste parcial podría ser inadecuado para estimaciones de la compositión de la demanda de dinero para los a?os setenta. La hipótesis es verificada con estimaciones independientes de las ecuaciones convencionales para los a?os sesenta y setenta, en los cuales se supone que hubo un cambio de régimen. Este consiste en el paso del sistema de cambios fijos a uno de cambios flexibles y en la aceptación general por parte de los bancos centrales de la filosofía monetarista en el sentido de utilizar una regla de cantidad en vez de una de precio. Los resultados de las regresiones para las dos submuestras defieren considerablemente, como también los resultados obtenidos estimando un esquema autoregresivo y un modelo de innovatión, este último para cada uno de los regímenes.

     

Transfer pricing and developing countries: Some problems of investigation

This paper reviews some of the main problems which arise for developing host countries in the investigation of transfer pricing of commodity trade by transnational corporations in manufacturing industry. The paper deals in turn with the following: the problems raised by the fact that the extent of intra-firm trade and the potential for manipulating transfer prices from case to case, especially because of the nature of technological innovation; the main handicaps faced by host developing country governments in collecting data on transfer pricing; and, the difficult conceptual issues that arise in defining the correct reference prices by which transfer prices may be judged. It concludes with the suggestion that intercountry cooperation is the most promising course of action in order to surmount these problems.     

The government revenue and government expenditure nexus: empirical evidence from nine Asian countries

The nexus between government revenue and government expenditure has been an important topic in public economics. In this paper, we investigate evidence for cointegration and causality between government revenue and government expenditure for nine Asian countries. We use the recently developed bounds testing approach to cointegration and the conventional F-test to examine Granger causality. Our empirical results suggest that for three out of the nine countries government revenue and government expenditure are cointegrated. Our results on the direction of causation are mixed: (a) for Indonesia, Singapore, Sri Lanka in the short-run and for Nepal in both the short- and long-run we find support for the tax-and-spend hypothesis; (b) Indonesia and Sri Lanka are in conformity with the spend-and-tax hypothesis in the long-run; and (c) for other countries there is evidence of neutrality.     

Bank liquidity creation: A new global dataset for developing and emerging countries

Review of World Economics - The pre-Global Financial Crisis build-up, followed by the post-crisis collapse, in bank liquidity creation in developed countries is well-documented (Berger and Bowman,...     

In search for stability: An empirical appraisal of the demand for money in the G7 and EC countries

Summary The demand for money has been at the centre of monetary econometrics. The policy debate has focused on the stability issue. To investigate this the present paper presents an overview of 400 estimated demand-for-money equations in the EC countries and G7 member states taken from the literature. The results of this survey suggest, firstly, serious doubts on the stability of the demand for money and, secondly, a remarkable evolution in econometric methodology in an attempt to improve the statistical evidence. Thirdly and important from a policy perspective, the analysis of the reported standard errors of the equations shows that among the large European countries Germany has the most stable money demand.     

Drivers of technical efficiency in Malaysian banking: a new empirical insight

Restructuring and rationalisation of Malaysian banking in 2000 and the subsequent policy of deregulation and liberalisation adopted by Bank Negara Malaysia (BNM) have resulted in a significant transformation of Malaysian banking. Banks are now poised to play a pivotal role in the economic transformation of the economy as envisaged in the Financial Sector Blue Print 2011–20 of BNM. Using the data envelopment analysis technique, the technical efficiency of 19 commercial banks (8 domestic banks and 11 foreign banks) operating in Malaysia during 2005–12 is evaluated. Then, using bootstrap‐corrected efficiency scores, the drivers of bank efficiency were estimated using the Tobit regression approach. Results clearly show that three large domestic banks are not only more efficient than their counterparts, but are also more efficient than the foreign banks. Bank size and return on assets are found to be the significant drivers of technical efficiency of Malaysian banks. Capital adequacy and the advances to deposit ratio also have a role in driving technical efficiency. The results also indicate that banks that are more effective in managing credit risk, as reflected in a lower level of non‐performing assets as a percentage of total assets, and have lower levels of personnel expenses to total assets, are more efficient. The findings have significant implications at the individual bank level and also at the policy level.     

Linking agribusiness and small-scale farmers in developing countries: Is there a new role for contract farming?

This article examines a new role for contract farming in developing countries in the light of the industrialisation of agriculture and the globalisation of world markets. A theoretical rationale for contracting in developing countries is developed on the basis of adopting new institutional economic theory for the purpose of matching governance forms to market failure problems and transaction characteristics. The history of contract farming is reviewed, together with the advantages and disadvantages to the various players, for the purpose of developing a list of key success factors, problems and some possible solutions.     

Exchange rates and European countries’ export prices: An empirical test for asymmetries in pricing to market behavior

Exchange Rates and European Countries’ Export Prices: An Empirical Test for Asymmetries in Pricing to Market Behavior. — This paper uses forward instead of spot exchange rates to test for the presence of asymmetries in the response of export prices to exchange rate movements on a wide sample of European Union exporter countries and highly disaggregated product categories. In most cases, the data give support to the hypothesis of a symmetric pricing to market behavior during periods of depreciation and appreciation of the exporter’s currency.