61 research outputs found
Capital flight, saving rate and the golden rule level of capital: policy recommendations for Latin America countries
This paper seeks to analyse the determinants of capital flight in selected Latin American countries throughout the 1990s, and gives some insights into what economic policies would be adequate under capital flight conditions. Finding, empirically, the saving rate to be a new determinant of capital flight, this paper discusses whether or not achieving the golden rule level of capital would be desirable and what source of government revenue (direct or indirect taxation) would be appropriate under those conditions
On the differential impact of monetary policy across states/territories and its determinants in Australia: Evidence and new methodology from a small open economy
Monetary shocks largely affect economic activity in Western Australia. In smaller proportion, those shocks generate contractions in New South Wales, Victoria and South Australia, while economic activity in Queensland is significantly less affected. Finally, we develop a new approach to uncover the determinants of the differential state/territory responses to monetary shocks. Our estimation validates the theoretical assumptions that differences in industrial composition, exposure to international trade and household debt across states/territories are important determinants of these differences
Modelling asymmetric consumer demand response: Evidence from scanner data
We used scanner data to test whether two competitive commodities respond symmetrically by volume to price changes. Our results indicate that consumers of the most expensive good (Coca-Cola) respond quite symmetrically when prices go either up or down. In contrast, consumers of the less expensive good (Pepsi-Cola) respond quite asymmetrically. We also introduce the substitution effect in ARDL asymmetric modelling as scanner data permits, showing that most previous asymmetric models using this technique experience omitted variables since this parameter is excluded
Trade Uncertainty and Income Inequality
This paper examines the relationship between trade uncertainty and income inequality. In
countries where only a small share of the population is educated, an increase in trade
uncertainty is associated with a significant increase in income inequality. As education of the
population increases the relationship between trade uncertainty and income inequality becomes
more muted. Trade uncertainty has no significant effect on income inequality in countries that
are world leaders in education. Developing countries that want to reduce income inequality
arising from trade uncertainty should therefore consider further improving their education
system
Oil prices and the economy: A global perspective
This paper investigates the relationship between oil prices and the global economy. In modelling this relationship, a new approach is proposed in which we introduce the use of a factor error correction model to compress data from the largest developed and developing economies. An important feature of this model is that at global level, we find that global money, output and prices are cointegrated, which is supportive of the quantity theory of money. Positive innovation in global oil price is connected with global interest rate tightening. Positive innovation in global money, CPI and outputs is connected with an increase in oil prices while positive innovations in global interest rate are associated with a decline in oil prices. The US, Euro area and China variables are the main drivers of global factor
Chinese monetary expansion and the U.S. economy: A note‎
This paper examines the influence of monetary shocks in China on the U.S. economy over ‎‎1996-2012. The influence on the U.S. is through the sheer scale of China’s growth through ‎effects in demand for imports, particularly that of commodities. China’s growth influences ‎world commodity/oil prices and this is reflected in significantly higher inflation in the U.S. ‎China’s monetary expansion is also associated with significant decreases in the trade ‎weighted value of the U.S. dollar that is due to the operation of a pegged currency. China ‎manages the exchange rate and has extensive capital controls in place. In terms of the ‎Mundell–Fleming model, with imperfect capital mobility, sterilization actions under a ‎managed exchange rate permit China to pursue an independent monetary policy with ‎consequences for the U.S.
Global Commodity Prices and Global Stock Volatility Shocks
This paper investigates the time-varying dynamics of global stock volatility, commodity prices, and domestic output and consumer prices. The main empirical findings of this paper are: (i) stock volatility and commodity price shocks impact each other and the economy in a gradual and endogenous adjustment process; (ii) the impact of a commodity price shock on global stock volatility is far greater during the global financial crisis than at other times; (iii) the effects of global stock volatility on the US output are amplified by the endogenous commodity price responses; (iv) in the long run, shocks to commodity prices (stock market volatility) account for 11.9% (6.6%) and 25.1% (11.6%) of the variation in US output and consumer prices; (v) the effects of global stock volatility shocks on the economy are heterogeneous across nations and relatively larger in the developed countries; (vi) developing/small economies are relatively more vulnerable upon commodity price shocks
- …