Causality Tests, Interdependence and Model Selection: Aplication to OECD countries 1960-97

This paper compares several methodologies for analysing unidirectional and bi-directional causality between Consumption and GDP in 25 OECD countries during the period 1960-95. For analysing unilateral causality a comparison is made between cointegration tests and joint regression on alternative explanatory variables, with 100% of correct results in the case of joint regression and lower percentages of success for cointegration approach. Bilateral causality is analysed comparing Granger´s test, a modified version of Granger´s test here suggested, TSLS, Hausman´s causality test and other approaches. The main conclusion is that the modified version of Granger´s test performs rather well and that Hausman´s test is very often useful for reinforcing the conclusions of multiple equations models with contemporaneous interdependence. Regarding the bilateral relationship between Consumption and GDP we conclude that there is a moderate degree of contemporaneous relation, with a high degree of dependence of Private Consumption on GDP and a lower dependence in the case of the reverse relation, because GDP is more dependent on supply side conditions than on demand side. This result is relevant for economic policies in less developed countries where very often emphasis is made more in the reverse relations than in the main ones.

Causality and Cointegration between Consumption and GDP in 25 OECD countries: limitations of cointegration approach

A critical review of cointegration is presented in this paper, emphasizing some limitations of this approach to testing causal relations in Econometrics. Very often the usual way of analysing cointegration leads researchers to declare many important causal relations as spurious when they are obviously not. On the other hand that approach does not always avoid the peril of accepting as causal relations those that really are spurious. An application of the tests to the relation between Private Consumption and Gross Domestic Product in 25 OECD countries, during the period 1960-97, is performed and the results confirm the above mentioned limitations of cointegration tests. The most extreme case is that of the UK where, in one of the applications, the usual tests lead to rejection of cointegration between british Private Consumption and british GDP and acceptance of cointegration of british Private Consumption with GDP of all the other countries. Regarding cointegration we should take into account two important points: one is that many causal relations with autocorrelation coefficient of residuals near 0.9 show a result of uncertainty, or a result of near cointegration, and should not be counted as rejections. A second, equally important point, is that sometimes the problem of no cointegration among several variables, is due to small problems in the specification of the model, easily avoided with some changes in the form of the dynamic relation, and not to the existence of non-causal relations.

Econometric Models of Agriculture in OECD Countries: Production, Income, and Agrarian Employment in Spain, France, Japan, and the Usa, 1965-99.

We present a general view of agricultural employment in four OECD countries: Spain, France, Japan and the USA during the period 1900-1999 and we analyse the effects of the technological transformation this sector underwent during the period 1965-99, by means of an econometric model for agrarian employment and real valued added. A pooled regression is selected after testing the homogeneity of parameters in the four countries. The conclusions point to the important diminution in relative prices of agriculture as the main explanatory variable which accounts both for employment decrease and stagnation, or decline, in agricultural real income, in spite of high increases in real production. The study of this is important as many developing countries are now facing such a socio-economic transformation. There is a need for a change in order to foster analyses of income, prices and other important variables related with the quality of life both of farmers and consumers.

Employment and Regional Tourism in Europe, 1990-2000

Este articulo analiza varios indicadores de actividad turistica en 100 regiones de 12 paises de la Union Europea durante el periodo 1990-2000. Analizamos las posiciones que las distintas regiones ocupan en el ranking de indicadores de turismo hotelero y extra-hotelero. Consideramos que ambos tipos de turismo son importantes pues tienen una influencia positiva sobre el desarrollo del Valor Añadido y el Empleo en varios sectores, especialmente en los servicios comerciales y en la construccion. Presentamos un modelo econometrico que tiene en cuenta el impacto positivo de ambos tipos de turismo sobre el empleo no agrario de las regiones europeas. This article analyses some indicators of tourist activity on a regional level in 100 European Union regions belonging to 12 countries during the period 1990-2000. We analyse ranking positions in hotel tourism indicators and extra-hotel tourism indicators. Both types of tourism have a positive influence in the development of Value-Added and Employment in several sectors, particularly in commercial services and building activities. We present an econometric model that has into account the positive impact of both types of tourism in non-agrarian employment of European regions.

Employment and regional development in France

We present an econometric analysis, with a cross section sample of 22 French regions, that shows the significant impact of several factors on regional development. The main factors here considered are industry, tourism and public sector activities. The article also analyses the evolution of employment rates in France, in comparison with European Union and USA, as well as the regional distribution of the economic activities that favour employment and economic development. The period of analysis is 1960-2000 for national data and 1985-98 for regional data.

Wages, Employment and Productivity in EU and USA

We analyse the evolution of regional employment in EU countries, and present some econometric models which relate employment with wages, economic growth and productivity. This study points to the main causes the important regional disparities of wages and rates of employment that exist in EU15 and EU24, as well as the low level of the average rate of employment in comparison with the USA and other areas. Finally we suggest some European policies that should be have into account in order to foster employment and real wages in the less developed regions as well as the average rate of employment of European Union.

Education, Industrial Development and Foreign Trade in Argentina: Econometric Models and International Comparisons.

Economic policies in Argentina, during the last decades of the 20th century, have been generally focused more on monetary policies than on other questions really more related with economic development, such as expenditure on education and sustained industrial development, which unfortunately have not received enough attention. In this paper, we compare the economic development of Argentina with that of the OECD countries and Latin America, and we estimate some econometric models to relate education and foreign trade with industrial and non-industrial real Gross Domestic Product per inhabitant in Argentina during the period 1960-2000. These models show the important positive impact that human capital and industrial investment have on the development of Argentina. We suggest some changes in the economic policies priorities, for the first decade of the 21st century, in order to focus more on education and industrial development, learning from the best lessons of Ireland and other countries, to get fast increases of real Gdp per inhabitant, eradicate poverty and improve socio-economic well-being.

Economic Development in OECD Countries during the 20th Century

We present an analysis of economic growth and cycles in main EU, USA, Japan and other OECD countries during the period 1900-1997, and more detailed data and analysis of main economic aggregates for 25 OECD countries during the period 1964-94, including comparisons of Private and Public Consumption, Investment, External Trade and Population. The economic comparisons have into account both exchange rates and purchasing power parities. Some important aspects of demand and supply are analysed in relation with their influence both on economic growth and cycles. We use exponential rates of growth which are interesting for seeing the important influence that moderation of fertility rates have had in the increase of real GDP by inhabitant in OECD countries in comparison with other areas of the World. OECD countries have been generally advanced in education development and that has been one of the more important factors that explain their good performance during the first and second half of 20th century.

Economic Development of African and Asia-Pacific Areas in 1951-99

During the second half of the 20th century Asia as a whole experienced a much higher increase in production by inhabitant than Africa, due to several factors which caused improvements in industrial development and moderation in the rates of population growth. We present a comparison, at area level, of economic growth, education, fertility and production by sector in large areas of Africa and Asia and South-Pacific, analysing the main differences in economic development among these areas during the 20th century, with special reference to the period 1980-99.

Economic Development of American and European Areas in 1951-99

We present a comparison, at area level, of production by sector in America, Western Europe, Central Europe, East Mediterranean and East Europe, including also Russia and former Ussr countries, and we analyse the main differences among these areas in economic development during the 20th century.