Economic growth and nonrenewable resources: An empirical investigation

In this paper, we investigate the role of nonrenewable resources in economic growth from 1995–2010. The surprising result is that the share of nonrenewable resource exports in 1996 GDP was positively associated with subsequent economic growth. In fact, for the period under study, we found no strong evidence of the resource curse, after controlling for other important determinants of economic growth. For the period under study, most economies were open and followed policies that enabled large flows of foreign investment between economies. Our finding suggests that public institutions — measured by using an index of government effectiveness — are of paramount importance to economic growth. This suggests that if a resource-rich economy needs a greater contribution from its resources, it should improve its public- and private-sector institutions.growth, primary-product exports, nonrenewable resources, institution

Suburban ways of living and the geography of income: How homeownership, single-family dwellings and automobile use define the metropolitan social space

Current research depicts suburbs as becoming more heterogeneous in terms of socio-economic status. Providing a novel analysis, this paper engages with that research by operationalising suburban ways of living (homeownership, single-family dwelling occupancy and automobile use) and relating them to the geography of income across 26 Canadian metropolitan areas. We find that suburban ways of living exist in new areas and remain associated with higher incomes even as older suburbs, as places, have become more diverse. In the largest cities the relationship between income and suburban ways of living is weaker due to the growth of condominiums in downtowns that allow higher income earners to live urban lifestyles. Homeownership is overwhelmingly more important than other variables in explaining the geography of income across 26 metropolitan areas.geography of income; income; suburbanisms; suburban ways of living; suburb

Let them eat cake: Food prices, domestic policy and social unrest

Recent price spikes in the international commodity markets have been blamed for numerous riots, protests and other forms of civil unrest. While these effects are widespread, they are not universal. In this article we investigate the relationship between food prices and social unrest. More specifically, we are concerned with the factors that make civil conflict more or less likely when food prices are elevated. We borrow from the extant literature on civil conflict as well as agriculture economics in order to analyze this phenomenon and help explain the variation among different countries. By merging these two research programs, we hope to make a contribution to each. We utilize a domestic-level measure of food prices rather than the world market price in order to more accurately represent national-level economic conditions. Our results show a positive and significant relationship between food prices and outbreak of social unrest and conflict across a wide range of coutries. Thus, we recommend the inclusion of a food price variable into any future studies of civil conflict. More importantly, we have helped to identify the potential factors that might insulate countries from food-oriented conflict. Given the events of the past year, this issue is paramount for scholars and world leaders alike.Agriculture; Arab Spring; civil conflict; commodity markets; food price; price shocks; riots; unres

Unpleasant debt dynamics: Can fiscal consolidations raise debt ratios?

Using PESSOA, a medium-scale DSGE model for a small euro-area economy, we evaluate how fiscal adjustments impact short- and medium-term debt dynamics and output for alternative policy options, and budgetary and economic conditions. Fiscal adjustments may increase the public debt-to-GDP ratio in the short run, even for consolidations carried out in normal times in economies characterized by moderate indebtedness levels. Financial turmoils and hikes in the nationwide risk premia, coupled with high indebtedness levels and stiff fiscal measures, boost the output costs of scal consolidations and severely aect their eectiveness in bringing the public debtto-GDP ratio down in the short term. In the medium run credible fiscal adjustments entail a decline in the public debt ratio, though at potentially very large output losses when carried out under unfavorable budgetary and economic conditions.Fiscal policy; Fiscal consolidation; Debt ratio; Crisis; DSGE model; Euro Area; Small open economy

Inference in linear models with structural changes and mixed identification strength

This paper considers estimation and inference in a linear model with endogenous regressors and parameter instability. We allow for structural changes in the parameters of the structural and reduced forms, and for mixed identification strength: the identification may not be strong over the whole sample, and may even change over time. In addition, we allow the second moments of the data generating process to change over time (e.g. changes in the variance of the structural errors, and/or in the variance of the instruments). We propose and derive the limiting distributions of two tests for parameter changes in the structural form: when the reduced form is stable and when the reduced form exhibits structural change. We also propose and derive new GMM estimators for the unstable structural form. We show that if the RF is stable, they are more efficient than the standard subsample GMM estimators, even in the presence of weaker identification patterns.GMM; Semi-strong identification; Break-poin

Interregional Migration and Transportation Improvements in Iceland

This article examines the relationship between migration and transportation improvements. More precisely, will transportation improvements between central business districts (CBDs) and rural areas make migration trends more favorable in rural areas? Due to household utility geographical differentials, there are interregional migration. Thus, it is resaonable to believe that transportation improvements that increase the access of rural population to the labor and the service market of CBDs will influence interregional migration in rural areas positively. I will examine whether this is true for Iceland, a thinly populated area with two CBDs. A macro panel data set from Iceland will be used. It represents several essential varaibles of the house market for seventy-nine municipalities in Iceland during the period from 1986 to 2006. Furthermore, I will investigate whether there are any gender aspects regarding the matter.migration; human spatial structure; spatial structure; spatial interaction; transportation; regional econometric models; economic analysis; methods; impact analysis; urban and regional economic development; economic growth and development; policy and application

Trial and Error? Reelection Concerns and Policy Experimentation during the U.S. Welfare Reform

We study the political economy of policy innovations during the U.S. welfare reform in 1996. Specifically, we investigate how reputation concerns among governors influence the decision to experiment with welfare policies. In line with a political agency model, our empirical results suggest that governors with high reputation among the electorate are less likely to experiment with welfare policies than governors with low reputation. Yet, governors with high reputation who are less concerned about reelection actually experiment more than governors striving for reelection. Overall, our findings imply that reelection concerns may inhibit innovation in the public sector.policy innovation, reputation concerns, U.S. welfare reform, experimentation, reelection concern

On the Stylized Facts of Nominal Exchange Rates in Brazil, Chile, Colombia, Mexico and Peru

Together with a set of not commonly reported ones, the most widely known stylized facts of high frequency Nominal Exchange Rates in Brazil, Chile, Colombia, Mexico, and Peru with respect to the US Dollar are studied and interpreted to the light of recent literature in this paper. Among many other results, findings include (i) the tails of ordinary and absolute returns distributions follow inverse power laws, a family of widely occurring empirical regularities which seem to arise from Central Limit Theorem assumption violations and which may be interpreted through the “universality principle”; (ii) the smooth sinusoidal long-run trend and short-term noise dynamics of our nominal exchange rates are dominated by a ragged short to long-term non-symmetric cyclic component in Chile, Colombia and Brazil, while the opposite happens in the remaining two countries; and (iii) time domain component correlation between countries suggest the existence of common factors explaining these rates that may be related to carry trade and time-varying risk related to the appetite for risk of international investors.Nominal Exchange Rate, Stylized Facts, Lata

The ‘visible hand’ of the ECB’s quantitative easing

In the midst of the market turbulence of recent years, policy rates have reached the zero lower bound, with central banks aggressively deploying their balance sheet with an array of ‘unconventional’ monetary policies to ensure the transmission of monetary policy impulses in disrupted financial markets, ultimately to set the conditions for economic recovery. Since March 9th, the European Central Bank (ECB) has also joined the club of central banks deploying the most feared monetary policy tool in its armoury. Unsterilised outright asset purchases (so-called ‘quantitative easing’, or QE) aim to re-establish control over the transmission of monetary policy impulse via policy rates by improving conditions for unsecured interbank market activity. This paper examines three dimensions of quantitative easing: i) the rationale behind the ECB’s new monetary policy stance, ii) the operational challenges of QE and iii) preliminary evidence on the effects of QE on markets