Deconstructing China’s and India’s Growth - The Role of Financial Policies

This paper uses the standard one-sector neoclassical growth model to investigate why Chinas consumption has been low and investment high. It finds that the low cost of capital has been quantitatively an important factor. Theory predicts that the price of capital may have been significantly distorted in the 1990s and 2000s. The distortion could have been caused by nonperforming loans, borrowing constraints, and uncertainty over changes in government guidance in bank lending. In one form or the other, these distortions have implied significant transfers from households to firms. If China is to rebalance growth towards relying more on consumption and less on exports and investment, banking sector reforms and financial market development could, therefore, turn out to be key.Business cycle accounting, rebalancing growth, financial distortions

Challenges of Climate Change and Bioenergy

Atmospheric concentration of the Green House Gases, Carbon Dioxide, Methane and Nitrous Oxide has increased largely since Industrial Revolution. Continued GHG emissions at or above current rates would cause further warming and induce many changes in global climate system. Climate changes will lead to more intense and longer droughts, water scarcity and many other problems then have been observed. For these reasons concept of development of bioenergy came into existance for climate change mitigation, energy security and agricultural and rural development. But can biofuels really deliver? There is also a negative facet of the story. There are several challenges posed by the increased usage of bioenergy. This paper will cover in detail the challenges posed by Climate Change and Bioenergy to our planet.Climate Change;Bioenergy;Food Crisis;Food Security

China's Provincial Growth Dynamics

China’s rapid overall growth since 1978 masks significant differences in relative economic performance across its provinces. This paper finds that, while per capita income of poor provinces are catching up with those in the rich, the relative income distribution appears to be stratifying into a bimodal distribution—the coastal provinces gravitating toward one mode, and the remaining provinces toward the other—with economic structure and policies playing important roles in the growth dynamics.Provincial growth; convergence; twin peaks

Does the Participation in the Microcredit Programs Increase Consumption of Participating Households? The Case of the Grameen Bank in Bangladesh

This paper assesses empirically the impact of the participation in the microcredit program of the Grameen Bank on consumption of participating households. A household level survey was carried out for collecting data (N=521). The results of the empirical estimations indicate that the participation of a household in the microcredit program of the Grameen Bank increases consumption of participating households significantly. But there is non-linearity in the increasing trend in consumption of participating households. The consumption level goes up gradually with the increase in the membership duration up to five years of membership, but the growth rate starts declining after that period of membership.Microcredit, Consumption, Impact Assessment, Grameen Bank, Bangladesh, Agricultural Finance, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty,

Energy consumption, CO2 emissions and the economic growth nexus in Bangladesh: cointegration and dynamic causality analysis

The paper investigates the existence of dynamic causality between the energy consumption, environmental pollutions and economic growth using cointegration analysis for Bangladesh. First, we tested whether any long run relationship exist using Johansen bi-variate cointegration model which is complemented with auto-regressive distributed lag model introduced by Pesaron for the results robustness. Then, we tested for the short run and the long causality relationship by estimating bi-variate vector error correction modeling framework. The estimation results indicate that a unidirectional causality run from energy consumption to economic growth both in the short and the long run; a bi-directional causality from electricity consumption to economic growth in long run but no causal relationship exists in the short run. A uni-directional causality run from CO2 emissions to energy consumption in the long run but it is opposite in the short run. CO2 granger cause to economic growth both in the short and in the long run, which is conflicting to the familiar environmental Kuznets curve hypothesis. Our results are different from existing analysis for electricity consumption and economic growth, however. The result of dynamic linkage between energy consumption and economic growth significantly reject the ‘neo-classical’ assumption that energy use is neutral to economic growth. Hence clearly an important policy implication, energy can be considered as a limiting factor to the economic growth in Bangladesh and conservation of energy may harm economic spurs. Therefore, it is a challenge for the policy makers to formulate sustainable energy consumption policy to support smooth energy supply for sustainable economic growth