Convergence of greenhouse gas emissions among G7 countries

The convergence of air pollutants is a major concern for policymakers since all the countries pursue the goal of allocating the emissions equally internationally in the future. Hence, the examination of the existence of convergence is important for the climate change protection of the earth. In this article, greenhouse gas (GHG) emissions convergence among the G7 countries for the period between 1990 and 2011 is examined using the pairwise testing technique proposed by that aims to analyse probabilistic convergence across a large number of cross-sectional units. Next, we proceed with multivariate tests for stability and the existence of unit roots. Finally, the analysis is complemented by the use of the panel stationarity test accounting for structural changes as proposed by Carrion-i-Silvestre et al. (2005) test. Overall, the results do not confirm the hypothesis of convergence for the countries in question, although, more recently, the countries have shown a small decline in their GHG emissions.     

Research output and economic growth in G7 countries: new evidence from asymmetric panel causality testing

Recent studies have shown increasing interest on the relationship between research output and economic growth. The study of such a relationship is not only of theoretical interest, but it can also influence specific policies to improve the quality, and probably the quantity of research output. This article has studied this relationship in G7 countries using the asymmetric panel causality test of Hatemi-J (2011). Our results show that only the UK shows a causal relationship from the output of research to real GDP. However, when the signs of variations are taken into account, there is an asymmetric causality running from negative research output shocks to negative real GDP shocks.     

Explosive bubbles in the US–China exchange rate? Evidence from right-tailed unit root tests

In this article we apply novel right-tailed unit root (sup Augmented Dickey-Fuller (SADF) and generalized sup ADF) tests to the China–US exchange rate. The empirical results document that the recent financial crisis in 2008 may be preceded by early warning signs of exuberance. Using the SADF test, evidence of an explosive behavior in the nominal exchange is found from 2005 onwards. This period coincides with both financial reforms in China and early indications of an impending US crisis that both have been reported in the literature. Our findings suggest that such an explosive behavior may be attributable to differences in the relative prices of traded goods. Policy implications are also derived.