Barro's fertility equations: the robustness of the role of female education and income

Barro and Lee (1994) and Barro and Sala-i-Martin (1995) find that real per-capita GDP and both male and female education have important effects on fertility in their cross-country empirical studies. In order to assess the robustness of their results, their estimated models are subjected to specification and diagnostic testing, the effects on the model of using the improved Barro and Lee (1996) cross-country data on educational attainment of the population aged 15 and over are examined, and the different specifications used by Barro and Lee and by Barro and Sala-i-Martin compared. The results obtained suggest that their fertility equations do not perform well in terms of diagnostic testing, and are very sensitive to the use of different vintages of the educational attainment proxies and of the Summers-Heston cross-country income data. A robust explanation of fertility, to link with empirical growth equations, has, therefore, not yet been found; further work is required in this area

An assessment of EU Cohesion Policy in the UK regions: direct effects and the dividend of targeting. LEQS Discussion Paper No. 135/2018 June 2018

With the prospective exit of the UK from the European Union, a crucial question is whether EU Structural Funds have been beneficial for the country and which aspects of Cohesion Policy should be maintained if EU funds are to be replaced. This paper addresses this question through a twofold investigation, assessing not only whether but also how EU funds have contributed to regional growth in the UK over three programming periods from 1994 to 2013. We document a significant and robust effect of Cohesion Policy in the UK, with higher proportions of Structural Funds associated to higher economic growth both on the whole and particularly in the less developed regions of the country. In addition, we show that the strategic orientation of investments also plays a distinct role for regional growth. While concentration of investments on specific pillars seems to have no direct growth effects, unless regions can rely on pre-existing competitive advantages in key development areas, we unveil clear evidence that targeting investments on specific areas of relative regional need has a significant and autonomous effect on growth. These findings have important implications for the design of regional policy interventions in Britain after Brexit

Inequality and violent crime: evidence from data on robbery and violent theft

This article argues that the link between income inequality and violent property crime might be spurious, complementing a similar argument in prior analysis by the author on the determinants of homicide. In contrast, Fajnzylber, Lederman & Loayza (1998; 2002a, b) provide seemingly strong and robust evidence that inequality causes a higher rate of both homicide and robbery/violent theft even after controlling for country-specific fixed effects. Our results suggest that inequality is not a statistically significant determinant, unless either country-specific effects are not controlled for or the sample is artificially restricted to a small number of countries. The reason why the link between inequality and violent property crime might be spurious is that income inequality is likely to be strongly correlated with country-specific fixed effects such as cultural differences. A high degree of inequality might be socially undesirable for any number of reasons, but that it causes violent crime is far from proven

What determines demand for freight transport?

Decisions about investments in the long-lived assets of transport infrastructure require some assumptions about prospective long-term demand from services using that infrastructure. To improve the basis for such predictions, the authors estimated the long-run determinants of domestic freight transport, using single-equation regressions on a cross-section of data from developed (high-income), developing (low-income) and former socialist economies. They also sought answers to two related questions. First, since statistics on national ton-kilometers of freight transport are much scarcer for developing than for developed countries, what is the scope for generalizing from data on high-income countries? Second, within what limits may one apply results obtained from data on market economies to the prospective evolution of freight transport demand in the socialist transitional economies? They report the following finds, subject to caveats related to the simple methodology used. For the sample of developed countries, and the merged samples of developed plus developing countries, total ton-kilometers of freight transport (excluding transit) are adequately explained by two variables: a country's area and total GDP. Ton-kilometers by road are chiefly explained by GDP; ton-kilometers by rail are explained by countryarea. Road freight in developed and developing market economies shows very similar response (in additional ton-kilometers) to variations in GDP. But the elasticity of demand for road ton-kilometers with regard to GDP should be about or above 1.25 for developing countries, compared with close to unity for the high-income countries. Demand for rail freight transport appears to be determined in closely similar ways in both groups of countries. Elasticity with GDP appears to be close to unity. Judging from the narrow basis of evidence on socialist economies (China and the former USSR were excluded for technical reasons), transport demand was determined very differently in their systems than in the market economies. The contrasts are almost entirely explained by the differences in the role of, and demand for, rail transport in the different economic systems. The road sector of freight transport, on the other hand, conforms closely to norms in the market economies; the marginal response (additional ton-kilometer for additional GDP) and elasticity with respect to GDP, appear - on the available evidence - to be close to what is found for developed market economies. In short, structural change in the socialist economies is likely to bring about far greater changes in rail freight activity than in road transport.Environmental Economics&Policies,Railways Transport,Poverty Impact Evaluation,Economic Theory&Research,Climate Change

An Analysis of Exports and Growth in India: Some Empirical Evidence (1971-2001)

The relationship between exports and economic growth has been analysed by a number of recent empirical studies. This paper re-examines the sources of growth for the period 1971-2001 for India. It builds upon Feder´s model to investigate empirically the relationship between export growth and GDP growth (the export led growth hypothesis), using recent data from the Reserve Bank of India, and by focusing on GDP growth and GDP growth net of exports. We investigate the following hypotheses: i) whether exports and GDP are cointegrated using both the Engle-Granger and the Johansen approach, ii) whether export growth Granger causes GDP growth, iii) and whether export growth Granger causes investment. Finally, a VAR is constructed and impulse response functions (IRFs) are employed to investigate the effects of macroeconomic shocks

Re-Orient? MNC Penetration and Contemporary Shifts in the Global Political Economy

This article analyses IMF estimates of economic growth in 180 countries (IMF, 2009), and inks the results to the "Re-orient" approach, put forward by Frank, 1998. With global economic gravitation shifting to the Indian Ocean/Pacific region, the article also analyses the role of MNC (foreign capital) penetration as the key variable of past quantitative dependency studies for contemporary economic growth and social performance. In a Schumpeterian fashion, MNC penetration reflects the power, which transnational oligopolies wield over local economies. Today, social polarization and stagnation increase as a consequence of the development model, based on high MNC penetration.international relations and international political economy, economic development, technological change, growth

Business Cycle and Macroeconomic Policy Coordination in MERCOSUR

The paper analyzes cyclical comovements in the Mercosur area differentiating idiosyncratic from common shocks. In the Mercosur (or any region for that matter) shocks can be country-specific, affecting only one country or a specific set of countries (for example, a weather-related shock, a domestic policy shock); or they can be common to the entire region (for example, a change in the conditions in international capital markets or a world recession). Propagation mechanisms, in turn, are important because a shock that was initially country-specific, originating in one country, might eventually spillover to others. We build on the unobserved component approach to decompose the Mercosur countries real GDP (seasonally adjusted) fluctuations into these three components and compare them with previous results. The main findings in the paper are: first, common factors originating in impulses stemming from changes in investor’s sentiment are relevant to explaining regional output comovements and the spillover effects between neighbors are significant. Second, volatility matters, and matters especially in the case of recent regional agreements. Supply shocks in Mercosur countries tend to be larger than in the US and European countries. Third, finance matters for both volatility and output/price dynamics. Accelerator effects may be important in explaining some features of the output/price dynamics that the standard models based on vector autoregression techniques are unable to account for..