Political budget cycles in new versus established democracies

Like other recent studies, we find a political deficit cycle in a large cross-section of countries, but show that this result is driven by the experience of “new democracies”. The political budget cycle in new democracies accounts for the finding of a budget cycle in larger samples that include these countries and disappears when they are removed from the larger sample. The political deficit cycle in new democracies accounts for findings in both developed and less developed economies, for the stronger cycle in weaker democracies, and for differences in the political cycle across governmental and electoral systems. Our findings may reconcile two contradictory views of pre-electoral manipulation, one that it is a useful instrument to gain voter support and a widespread empirical phenomenon, the other that voters punish rather than reward fiscal manipulation.     

Federal tax policies,congressional voting and natural resources

Can abundance of natural resources affect legislators' voting behaviour over federal tax policies? We construct a political economy model of a federalized economy with district heterogeneity in natural resource abundance. The model shows that representatives of natural resource‐rich districts are more (less) willing to vote in favour of federal tax increases (decreases). This occurs because resource‐rich districts are less responsive to federal tax changes due to the immobile nature of their natural resources. We test the model's predictions using data on roll‐call votes in the US House of Representatives over the major federal tax bills initiated during the period of 1945–2003, in conjunction with the presence of active giant oil fields in US congressional districts. Our identification strategy rests on plausibly exogenous giant oil field discoveries and exploitation and narrative‐based aggregate federal tax shocks that are exogenous to individual congressional districts and legislators. We find that: (i) resource‐rich congressional districts are less responsive to changes in federal taxes and (ii) representatives of resource‐rich congressional districts are more (less) supportive of federal tax increases (decreases), controlling for legislator, congressional district and state indicators. Our results indicate that resource richness is approximately half as dominant as the main determinant, namely party affiliation, in driving legislators' voting behaviour over federal tax policies.     

Finding common seasonal patterns among time series: An MDS approach

This paper provides an approach to the analysis of time series seasonal pattern similarities based on a special MDS approach — the non-metric SSA-I (Smallest Space Analysis) technique. Indices of dissimilarity for time series are defined generally while special cases drawn from the economic problems are treated by means of examples. The basic contributions of the paper are two-fold: First we extend the use of SSA-I to time series analysis by transforming the mutual relationship between (as well as within) the time series in a symmetric matrix. As a result, the tool of SSA-I developed by L. Guttman may easily be used. Second, by an introduction of non-metric techniques such as SSA-I in time series analysis we increase our capacity to deal with problems hitherto unsolved. In particular, ordinal data as well as behavioral data for which model processes are not defined and seasonal patterns similarities may be studied by our technique.     

Exploring the relationship between visitor attractions and events: definitions and management factors

The growing definitional debate on the terms ‘visitor attractions’ and ‘events’ highlights the need to compare their key determinants and management factors. The article elaborates on this definitional debate, by exploring existing definitions and developing an illustration of a continuum between visitor attractions and events. This is followed by a comparison of the management factors and key criteria in the effective management of visitor attractions and events. The findings indicate that while there are many similarities between the sectors, aspects such as spatio-temporality and levels of integration with the visitor attraction nucleus are identified as factors that differentiate them. In conclusion, the article determines that events should be examined separately from the visitor attraction sector due to their differing perspectives, measures, and management needs.     

An Empirical Analysis of a Regional Dutch Disease: The Case of Canada

While there has been extensive research on the Dutch Disease (DD), very little attention, if any, has been devoted to the regional mechanisms through which it may manifest itself. This is the first empirical attempt to research a ‘regional DD’ by looking at the local and spatial impacts of resource windfalls across Canadian provinces and territories. We construct a new panel dataset to examine separately the key DD channels; namely, the Spending Effect and the Resource Movement Effect. Our analysis reveals that the standard DD mechanisms are also relevant at the regional level; specifically, we find that: (a) Resource windfalls are associated with higher inflation and a labour (capital) shift from (to) non-primary tradable sectors. (b) Resource windfalls in neighbouring regions are associated with a capital (labour) shift from (to) non-primary tradable sectors in the source region. (c) The (spatial) DD explains (51  %) 20  % of the adverse effects of resource windfalls (in neighbouring regions) on region-specific non-mineral international exports (in the source region), and does not significantly affect domestic ones.     

A note on factor analysis and arbitrage pricing theory

This paper examines some theoretical and empirical properties of factor analysis and spells out their implications for Arbitrage Pricing Theory (APT). Doubts on the appropriateness of conventional factor analytic procedures for testing APT are raised on theoretical as well as empirical grounds.     

Modeling exchange rate return volatility of RMB/USD using GARCH family models

The paper examines volatility of RMB exchange rate return of onshore and offshore markets. The onshore rate covered 4/01/2008–5/09/2016 while offshore spanned 31/12/2008-22/09/2016, the returns were not normally distributed and were integrated of order zero I(0). The Ljung-Box Q statistics depicts the presence of autocorrelation in return series and Ljung-Box Q² statistics of power transformed for conditional heteroscedasticity for lags of 6, 12 and 20 all indicated the presence of conditional heteroscedascity. The exchange rates volatility was persistent in both markets. However, offshore return was more persistent while leverage effects exist in both markets. Asymmetry power Autoregressive conditional Heteroscedastic (APARCH) model was the best model for forecasting purposes in both markets while Glosten, Jogannathan and Rankle, Generalized Autoregressive conditional Heteroscedastic (GJR-GARCH) model and Integrated Generalized Autoregressive conditional Heteroscedastic (I-GARCH) were the worst models in onshore and offshore return markets respectively. APARCH model should be adopted for future studies.