The local impact of typhoons on economic activity in China: A view from outer space

We examine the impact of typhoons on local economic activity in coastal China. To capture potential damages from an individual typhoon we use historical typhoon track data in conjunction with a detailed wind-field model. We then combine our damage proxy with satellite derived nightlight intensity data to construct a panel data set that allows us to estimate the impact of typhoons at a spatially highly disaggregated level (approx. 1 km). Our results show that typhoons have a negative and significant, but short-term, impact on local activity – a typhoon that is estimated to destroy 50% of the property reduces local economic activity by 20% for that year. Over our period of analysis (1992–2010) total net economic losses are estimated to be in the region of $US 28.34 billion. To assess the damage risk from future typhoons we use simulated probability distributions of typhoon occurrence and intensity and combine these with our estimated effects. Results suggest that expected annual losses are likely to be around $US 0.54 billion.     

政府债务对经济增长的影响及作用渠道

基于1960～2010年113个国家的面板数据集,运用系统广义矩动态面板方法和稳健性分析,比较发达国家和发展中国家政府债务经济增长效应的差异,并尝试分析政府债务影响经济增长的渠道。研究结果显示,政府债务对经济增长有非线性影响;发达国家政府债务对经济增长、投资以及全要素生产率均无显著影响;发展中国家对政府债务的直接承受力更弱,但在一个宽松的临界点内,政府债务的增加可以提高投资率。     

Stability of the World Trade Web over time – An extinction analysis

The World Trade Web (WTW) is a weighted network whose nodes correspond to countries while edge weights reflecting the value of imports and/or exports between countries. In this paper we introduce to this macroeconomic system the notion of extinction analysis, a technique often used in the analysis of ecosystems, for the purpose of investigating the robustness of this network. In particular, we subject the WTW to a principled set of in silico “knockout experiments,” akin to those carried out in the investigation of food webs, but suitably adapted to this macroeconomic network. Informed by results in network theory as well as studies of contagion in economic networks, we seek to understand the role of connectance in the robustness of the system. We interpret increasing connectance as one aspect of a move towards globalization and liberalized trade policy. Broadly, our experiments confirm two conjectures. First, that the WTWs are “robust yet fragile” networks — robust to random failures but fragile under targeted attack. Second, that growing connectance has both positive and negative impacts on robustness. More specifically, we find that increasing connectance corresponds to increasing robustness for small shocks but to decreasing robustness in the face of large, cascading shocks up to the system. This yields evidence in support of the view that globalization, as witnessed by increasing connectance, increases the ability of a system to absorb shock up until a certain size, whereupon the shock overwhelms the system and sparks a broader contagion. We anticipate that experiments and measures like these can play an important role in the evaluation of the stability of economic systems.     

Economic freedom: a comparative study

This paper presents a comparative study of economic freedom in five groups of countries: Free, Mostly Free, Islamic, Latin American, and a subset of EU member countries. The study includes 103 countries, and uses data from the 2007 Index of Economic Freedom. The paper tests for the statistical significance of the difference between group means for each of ten measures of economic freedom and for the overall freedom score. The empirical evidence shows that the Islamic countries have significantly less economic freedom than the other groups, and that they are the only group with declining economic freedom in the last 13 years.

Sensitivity of US equity returns to economic policy uncertainty and investor sentiments

This paper examines the sensitivity of major US sectoral returns to economic policy uncertainty and investor sentiments. Our analysis is based on weekly frequency and ranges from January 1995 to December 2015 covering a span of 20 years. Considering existing, however limited evidence of non-linear structure exhibited by investor sentiments and economic policy uncertainty and on the basis of our non-linear diagnostics, we use novel technique of non-parametric causality in quantiles approach proposed by Balcilar, Gupta, and Pierdzioch (2016). Our results highlight that economic policy uncertainty and investor sentiments act as driving factors for US sectoral returns. The nature of relationship is reported as asymmetrical for stock returns and symmetrical for variance of returns with an exception of Healthcare sector for economic policy uncertainty and bullish market sentiments. Our study carries implications for portfolio diversification and policy makers for forecasting market efficiency and economic trends.     

BEYOND THE STARS

It is frequent to hear in economic seminars or read in academic papers that an effect is economically significant or economically important. Yet, the economic literature is vague on what economic importance means and how it should be measured. In this paper, I show that existing measures of economic importance are flawed and misused. I derive a new metric that measures, in percentage terms, the contribution of each explanatory variable to deviations in the dependent variable, ceteris paribus. As an illustration, the method is applied to study the determinants of migration and the determinants of fertility.     

Structural and behavioral robustness in applied best-practice regulation

Benchmarking methods, primarily non-parametric techniques such as Data Envelopment Analysis, have become well-established and informative tools for economic regulation, in particular in energy infrastructure regulation. The axiomatic features of the non-parametric methods correspond closely to the procedural and economic criteria for good practice network regulation. However, critique has been voiced against the robustness of best-practice regulation in presence of uncertainty regarding model specification, data definition and collection. Incorrect data may result from structural sources, such as heterogeneous technologies; deterministic approaches applied to stochastic data generation processes or poorly defined scope of activity. Specifically within regulation, reporting may also be biased through individual gaming or collusive behavior, including the intentional provision of absurd data in order to stall or perturb regulatory process (here called maverick reporting). We review three families of outlier detection methods in terms of their function and application using a data set from Swedish electricity distribution, illustrating the different types of outliers, contrasting with the actual analysis ex post. This paper investigates the foundation of the critique both conceptually and by describing the actual state-of-the-art used in energy network regulation using frontier analysis models in Sweden (2000–2003) and in Germany (2007-). Finally, the paper concludes on the role of outlier detection as a mean to implement regulation with higher robustness.     

Modeling loss-propagation in the global supply network: The dynamic agent-based model acclimate

World markets are highly interlinked and local economies extensively rely on global supply and value chains. Consequently, local production disruptions, for instance caused by extreme weather events, are likely to induce indirect losses along supply chains with potentially global repercussions. These complex loss dynamics represent a challenge for comprehensive disaster risk assessments. Here, we introduce the numerical agent-based model acclimate designed to analyze the cascading of economic losses in the global supply network. Using national sectors as agents, we apply the model to study the global propagation of losses induced by stylized disasters. We find that indirect losses can become comparable in size to direct ones, but can be efficiently mitigated by warehousing and idle capacities. Consequently, a comprehensive risk assessment cannot focus solely on first-tier suppliers, but has to take the whole supply chain into account. To render the supply network climate-proof, national adaptation policies have to be complemented by international adaptation efforts. In that regard, our model can be employed to assess reasonable leverage points and to identify dynamic bottlenecks inaccessible to static analyses.     

PRODUCTIVE GOVERNMENT EXPENDITURE AND ECONOMIC GROWTH

Abstract.  We provide a comprehensive survey of the recent literature on the link between productive government expenditure and economic growth. We show that an understanding of the core results and the ensuing contributions can be gained from the study of their respective Euler equations. We argue that the existing literature incorporates many relevant aspects; however, policy recommendations tend to hinge on several knife-edge assumptions. Therefore, future research ought to focus more on idea-based endogenous growth models to check the robustness of policy recommendations. Moreover, the inclusion of hitherto unexplored types of government expenditure, e.g. on the 'rule of law', would be desirable.     

Publication Bias in the Economic Freedom and Economic Growth Literature

Abstract.  The impact of institutions on economic performance has attracted significant attention from researchers, as well as from policy reformers. A rapidly growing area in this literature is the impact of economic freedom on economic growth. The aim of this paper was to explore publication bias in this literature by means of traditional funnel plots, meta‐significance testing, as well as by bootstrapping these meta‐significance tests. When all the available estimates are combined and averaged, there seems to be evidence of a genuine and positive economic freedom – economic growth effect. However, it is also shown that the economic freedom – economic growth literature is tainted strongly with publication bias. The existence of publication bias makes it difficult to identify the magnitude of the genuine effect of economic freedom on economic growth. The paper explores the differences between aggregate and disaggregate measures of economic freedom and shows that selection effects are stronger when aggregate measures are used.     

Equity market and money supply spillovers and economic growth in BRICS economies: A global vector autoregressive approach

Previous studies report that private credit as a proxy of financial development contributes to economic growth in BRICS economies. This paper employs three additional measures of financial development, namely equity market, money supply and market capitalization, and further investigates cross-country evidence on the impact of equity market and money supply spillovers on economic growth in BRICS economies. Utilizing a Global Vector Autoregressive (GVAR) framework and quarterly data from 1989Q1 and to 2012Q4 from BRICS economies, we find that equity market and money supply variables do not predict the contributions of financial development in each BRICS member in boosting economic growth in the other member countries. However, market capitalization significantly influences economic growth. These results suggest that, besides private credit, market capitalization is another key channel of promoting growth in individual economies and the region. Policy implications of the findings are discussed.     

Human capital mobility patterns in the European Union and the financial crisis

This paper provides new evidence on the quantification of economic losses and/or gains from skilled human capital mobility in terms of GDP and productivity in several EU countries during and after the Great Recession. We construct two novel indicators to quantify and compare the economic effects of human capital mobility across EU countries in 2008, 2012, and 2016. Through hierarchical clustering, we created groups of countries to perform a non-parametric MANOVA. The results suggest the existence of three groups of countries aggregated by similar economic and mobility patterns. The differences between these groups are significant and allow us to delineate the countries’ gains and losses.

     

Forecasting leadership transitions around the world

We use popular non-parametric (CART, TreeNet) and parametric (logit) techniques to identify robust economic, demographic and political conditions that lead to shifts in control in the executive branch of government in 162 countries during the period 1960–2004. We find that institutional aspects of the political system, executive characteristics, demographic variables, economic growth, and economic trade variables are all very important for predicting leadership turnover in the following year. Financial crises are not robustly useful for this purpose, but a vulnerability to currency crises in times of low economic growth implies very high conditional probabilities of job losses for democratic leaders in non-election years. In-sample, TreeNet predicts 78% of leadership transition events correctly, compared to CART’s 70%, and TreeNet also generally achieves higher overall prediction accuracies than either CART or the logit model out-of-sample.     

中美两国经济实力与潜力的比较分析

改革开放以来,经过30多年的发展,中国已重新成为全球经济大国之一。本文利用C-D生产函数和索洛增长模型对中国中长期经济发展进行预测,在国内外研究成果的基础上对美国中长期经济发展进行预测,探讨了在不同情况下中美两国经济的对比分析和追及问题。本文预测结果表明,中国经济只要保持平稳增长,将在2030年前实现多个目标：一是GDP总量超过美国;二是人均GDP超过1.7万美元;三是人均国民总收入接近高收入国家行列;四是商品零售额、商品进口额等宏观指标赶上美国。     

The finance-growth nexus: The role of banks

We contribute to the finance-growth nexus literature by showing that credit origin, bank ownership, type of credit, and bank type matter in economic growth. We use a unique dataset covering 5555 cities in Brazil, with granular information on credit characteristics. We find that non-earmarked credit to the corporate sector is associated with municipal economic growth more strongly than earmarked credit, despite the increase in the relevance of the latter after the global financial crisis. We also find that the type of credit—whether the loans are general purpose or for a specific purpose—is associated with economic growth in different ways. Overall, credit provided to the corporate sector by domestic private banks is correlated with higher economic growth rates. In contrast, the relationship between credit from state-owned banks and economic growth becomes statistically significant only after the crisis. Although we follow the finance-growth literature in our empirical exercises using internal instruments in generalized method of moments (GMM) estimations, we also conduct robustness tests using two additional external instruments: the number of complaints filed against each bank and local credit accessibility. Our findings with external instruments are the same with respect to the use of traditional internal instruments in GMM estimations.     

Market‐oriented institutions and policies and economic growth: A critical survey

Abstract.  This paper surveys recent evidence suggesting that market‐oriented institutions and policies are strongly related to economic growth, focusing on studies using the economic freedom (EF) indicator of the Fraser Institute. This index is critically discussed. Also various serious shortcomings of empirical studies using this index are identified. Nevertheless, there are strong indications that liberalization, i.e. an increase in the EF index, stimulates economic growth. This paper also reviews studies on the determinants of EF. Political liberalization is often found to enhance economic liberalization, whereas there is less evidence for causality running in the other direction.     

经济增长主动力的国际比较

本文运用灰色关联法比较分析了中国与美国、印度、印度尼西亚、墨西哥四个人口大国的经济增长主动力的差异。实证结果表明,国内需求是中国与这四个国家经济增长的主动力,然而不同的是,这四个国家的消费需求对经济增长的影响大于投资需求的影响,而中国则是投资需求对经济增长的影响大于消费需求的影响;另外,净出口对中国经济增长的影响也大于这四个国家。据此,本文强调中国应加快形成内需尤其是消费需求为主,同时积极利用外需共同拉动经济增长的格局,促使经济更加稳定的可持续发展。进一步,本文也提出了相关扩大内需的政策建议。     

Economic factors affecting water supply resilience to disasters

Water supply systems need to be resilient enough to provide people and critical users with reliable water following a disaster. Previous research has shown that four main factors dictate system robustness and rapidity of recovery following a disaster: vulnerability, social capital, organisational capacity, and economic capital. This paper identifies the economic factors affecting water supply resilience. Relevant factors and indicators were gathered through a comprehensive literature review and verified through a series of interviews with water supply, resilience, and social scientists and economists. Economic capacity and quick access to finance were found to be the main economic factors influencing the resilience of water supply systems. Quick access to finance is most important in the early stages following a disaster for response and restoration, but its importance declines over time. In contrast, the economic capacity of the disaster struck area as well as the water sector play a vital role in the subsequent reconstruction phase rather than in the response and restoration period. Indicators for these factors were tested for the case of the February 2011 earthquake in Christchurch, New Zealand.     

农村配电网无功优化策略及应用分析

针对农村电网损耗大、末端电压偏低的问题,根据国内外无功补偿技术发展的经验,重点对农村10kV配电网无功补偿问题进行分析,提出旨在降低网损,提高农村配电网运行效率的无功补偿实用方案,包括基本原理、补偿容量的确定、经济性计算等内容,该方案对农村配电网的经济运行具有一定的参考价值。     

经济结构失衡背景下的中国经济增长质量

利用客观因子分析法与主观打分法相结合,测度了1978-2010年中国经济结构和各要素之间的失衡程度,利用结构方程模型分析了产业结构、投资消费结构、金融结构、区域经济结构与国际收支结构的失衡对于经济增长质量的影响。结果表明：中国经济结构整体失衡水平呈U型变化趋势,五大结构的失衡水平不断恶化。产业结构、投资消费结构、金融结构的失衡程度对经济增长质量产生了负效应,区域经济结构与国际收支结构对于经济增长质量产生正效应。在未来发展中,通过产业结构与投资消费结构、金融结构、区域经济结构、国际收支结构的协调、有序、均衡的调整,实现经济增长质量的稳定、可持续发展。