Trade Structure, Economic Development and International Transactions in Services

The goal of this paper is to investigate the empirical significance of trade in services for countries with different levels of economic development. Data are presented that characterize the relative importance of trade in services for countries with widely differing per capita income levels, population, and growh experiences.Research Seminar in International Economics, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100760/1/ECON224.pd

Working capital management and business performance: evidence from Latin American companies

Working capital management is one of the most important decisions that affect an organisation’s financial performance. Despite the importance of this topic, the empirical evidence for emerging economies is scarce; therefore, this research attempts to estimate and compare how investment in working capital impacts the financial performance of companies listed on the stock exchanges in Chile, Mexico, Peru, and Brazil for the years 2000 to 2018. This study uses panel data methodology, and the results show the existence of a positive and significant but non-linear relationship between investments in working capital and firm performance. However, there are mixed results for different countries and industries that could be explained by macroeconomic variables that favour access to financing for such investments. Furthermore, the results show that investments in working capital perform better for larger companies than smaller companies

Do Money Or Oil And Crop Productivity Shocks Lead To Inflation: The Case Of Pakistan

The worst economic outcomes have been argued as a result of the mismanagement in money supply especially in 1929’s Great Depression, 1970’s Stagflation and 2008’s Economic depression in the global economy. However, economic recessions tend to appear after oil price phenomenon. In particular, the global inflationary pressures of 2008 became severe with the spikes up in oil prices as well as crop productivity shocks in the world economy including Pakistan. The object of the present paper is to discuss inflation in the framework of Monetary and external Oil Price Shocks, Crop Productivity Propositions, Inflation Inertia, and real GDP growth. The empirical studies broadly uphold the monetary explanation of inflation in the Pakistan’s economy. This paper offers the policy implication that the combination of monetary as well as productivity management is required to arrest inflationary pressures in the economy. In addition, we find the comprehensive evidence that food inflation is also a monetary phenomenon in the Pakistan’s economy. On the other hand, the continuous persistence in inflation inertia does not hold as a result of the absence of autocorrelation in money supply in AR (2) or higher process in the data. Oil prices in terms of domestic currency highlight the fact that the transmission channel of world shocks via exchange rate fluctuations leaves significant impacts upon domestic inflation in the economy.Money; Inflation; Oil; Productivity

Economic behavior of households and their impact on the development model of the country

The article analyzes the motivation of the behavior of households as the most important factor that determines the choice of their strategy. Consequently, this choice has an impact both on the economy and global development. The results of the study determined that the world has two large economic models: European and Asian ones. The first one is a European model based on the paradigm of maximizing the well-being and the satisfaction of material goods, which is reflected in high consumption and low savings. The second one is an Asian model based on the understanding of the achievements of the welfare of households on the basis of prestige in the eyes of others through the prism of education, religiosity or moral principles of society, is inherent to a greater extent developing countries. As a result of this principle in Asian countries households have a high level of savings. However educated people tend to realize themselves in countries with the European model, which is more attractive for them. As a result of these contradictions, the world has created an imbalance, in which Asian countries with high saving rates are the suppliers of human resources and creditors for countries with the European model of development. System approach including comparative, intercountry, index and econometric ones is used in the research.This article is supported by the Urals Branch of the Russian Academy of Sciences, Project 15-14-7-2 “Forecast assessment of modernization priorities of the Ural industrial region for expanding the import substitution.

New estimates of total factor productivity growth for developing and industrial countries

The authors present new estimates of long-term total factor productivity (TFP) growth for 83 industrial and developing countries for 1960-87. These estimates are based on new data developed for the research project on total factor productivity growth (and available on diskette). Although based on the"old"growth theory, the estimates are derived from a cross-country production function using an error-correction model. This is more appropriate than the usual first-difference model for capturing long-term relations. The authors concluded the following: (a) The estimated cross-country production function shows that human capital accumulation is far more important in explaining growth than several earlier studies have indicated. This conforms with recent studies that find raw labor's share in income to be much less than thought previously. (b) Contrary to the results of other studies, TFP growth in high-income countries has been comparable to that in faster-growing low and middle income countries. (c) The fastest growing developing economies have based their growth more on the rapidity with which they have accumulated physical and human capital than on high TFP growth. (d) Cross-country differences in TFP growth are largely due to differences in the level of political stability and initial conditions (notably, initial per capita income and the initial level of human capital). (e) Cross-country differences in TFP growth (once corrected for initial conditions and political stability) cannot be explained by structural and policy differences for which data are readily available (despite and exhaustive search for other explanations). (f) Sub - Saharan Africa is the only region for which the actual TFP growth is significantly lower than the TFP growth predicted on the strength of initial conditions and political stability (by about 1.1 percentage points a year). The cross-country profile of TFP growth and the role of initial conditions point toward the dual role played by human capital in the development process: as a standard factor of production to be accumulated and as a source of learning and entrepreneurship and hence of interesting growth dynamics. It may be necessary to rethink the concept of"TFP as the residual"in models with human capital. The relationship between policy variables and TFP growth is likely to be sensitive tothe way human capital is incorporated in the production function. These substantive issues, along with a number of econometric refinements, are fruitful avenues for further research.Economic Growth,Economic Theory&Research,Achieving Shared Growth,Environmental Economics&Policies,Inequality

Are deep recessions followed by strong recoveries? Results for the G-7 countries

Group of Seven countries ; Recessions

Explaining the Negative Coefficient Associated with Human Capital in Augmented Solow Growth Regressions

In this paper we consider different explanations for why the coefficient associated with human capital is often negative in growth regressions once country-specific effects are controlled for, whereas the coefficient in question is strongly positive in cross-sectional or panel results based on the pooling estimator. In turn, we explore: (i) additional sources of unobserved heterogeneity stemming from country- specific rates of labor-augmenting technological change, (ii) measurement error in the human capital series being used, and (iii) the lack of variability in the human capital series once the usual covariance transformations are implemented. Remaining unobserved country-specific heterogeneity and measurement error alone are shown to be inadequate explanations. The lack of variability in the human capital series is tackled using a modified version of the Hausman-Taylor (1981) approach whose identifying assumptions are found to be reasonable in the context of the Solow model.Economic growth, human capital, measurement error, panel estimation

THE EFFECT OF FOREIGN INVESTMENT, GOVERNMENT EXTERNAL DEBT, AND GOVERNMENT EXPENDITURE ON GROSS DOMESTIC PRODUCT IN INDONESIA

This study aims to determine the influence of foreign investment, foreign debt, and government spending on Gross Domestic Product in Indonesia during 2005-2019. The data analysis method used in this study is a multiple regression analysis models using the Eviews application. The results show partially (t-test) show that foreign investment, foreign debt, and government expenditure have a positive and significant effect on gross domestic product.Then, the correlation coefficient or R-Squared value is 0.736793 or 73.67%. It shows that there is a strong correlation between the independent variables and the dependent variable. It concludes that foreign investment, foreign debt, and government spending have a positive and significant effect on the provincial gross domestic product in Indonesia from 2005 to 2019