48 research outputs found

    Growth by destination: the role of trade in Africa's recent growth episode

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    Over the period 1990–2009, Africa has experienced a distinct and favourable reversal in its growth fortunes in stark contrast to its performance in the preceding decades, leading to a variety of hypotheses seeking to explain the phenomenon. This paper presents both cross-country and panel-data evidence on the causal factors driving the recent turnaround in Africa's growth and takes the unique approach of disaggregating the separate growth impacts of Africa's bilateral trade with: China, Europe and America. The empirical analysis presented in this paper suggests that the primary and most robust causal factors driving Africa's recent growth turnaround are private sector- and foreign direct investment. Although empirical evidence of the role of bilateral trade openness in Africa's recent growth emerges within a fixed effect estimation setting, these results are not as robust when endogeneity and other issues are fully accounted for. Among the three major bilateral partners, Africa's bilateral trade with China has been a relatively important factor spurring growth on the continent and especially so in resource-rich, oil producing and non-landlocked countries. The econometric results are not as supportive of growth-inducing effects of foreign aid. These findings emerge after applying a variety of panel data specifications to the data, including the recent fixed Effects Filtered (FEF) estimator introduced by Pesaran and Zhou (2014) and the dynamic panel Generalized Method of Moments (GMM) estimator, which allows for endogeneity between trade and growth

    Exports Under the Flicker of the Northern Lights

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    Picture a small open economy in the North Atlantic Ocean, highly dependent on trade with the EU and NAFTA. How important are these trading blocs to the country's exports? How important is the country's location and size, and how do these affect the export sectors? A unique version of the gravity model is applied here using an inverse hyperbolic sine function. Typically, the export volume is significantly impacted by the economic size of the exporting country, but in this case it is not. This suggests that the exports from small remote economies are driven by different factors than exports from large conomies

    Three essays on U.S. tariff preferences for less-developed countries

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    This dissertation analyzes the effects of the United States Generalized System of Preferences (GSP) on imports from beneficiary Less Developed Countries (LDCs) from three perspectives. Three separate essays are written. All are ex post analyses. The first describes the effects of the U.S. GSP according to (a variant of) the shift-share approach. An attempt is made to measure the growth in U.S. imports from the beneficiaries between two points in time. Quantifiable causes of this growth are subtracted from the overall growth. The residual then is attributed to the GSP effect. The second essay explains changes in market shares of individual beneficiaries of the U.S. preference scheme. A cross-section statistical analysis is used to explain changes in market shares. The effect of a change (increase) in tariff caused by U.S. competitive need exclusion (CNE) on beneficiaries\u27 market shares is especially considered. Other factors which influence the beneficiaries\u27 market shares are also considered. The latter variables may provide a basis for the graduation of LDCs from the scheme. Finally, the third essay makes a gravity model estimate of the effects of the U.S. scheme of preferences. A cross-sectional statistical analysis across countries is used to explain bilateral trade flows between the U.S. and its beneficiaries, as well as other trade partners. In an attempt to estimate the effect of the U.S. GSP scheme on the beneficiaries, ad valorem tariff rates and GSP dummy variables are included in the model developed. The tariff variable is used to indicate the trade creation effect of the GSP, while the GSP dummy variable approximates the trade diversion effect of the GSP

    Random walks and monetary velocity in the G-7 countries: new evidence from a multiple variance ratio test

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    The random walk hypothesis (RWH) of the velocity of money has often been supported for the developed economies. The literature is, however, far from unanimous. This paper employs the most recent methodological advances in testing for random walks, the multiple variance ratio test, to re-examine the behaviour of the velocity of money in the G-7 countries. Monetary velocity is computed as the ratio of nominal income to contemporaneous money stock, under alternative definitions of income and money. The empirical results from the present study do not support the RWH in most of the G-7 countries, with the US M1 and M2 velocities as exceptions. Furthermore, the results show that the RWH is sensitive to either the definitions of monetary velocity or the sample period of study.
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