Showing papers on "Real gross domestic product published in 2012"

Energy Consumption, Economic Growth and CO2 Emissions in Middle East and North African Countries

Abstract: This article extends the recent findings of Liu (2005), Ang (2007), Apergis et al. (2009) and Payne (2010) by implementing recent bootstrap panel unit root tests and cointegration techniques to investigate the relationship between carbon dioxide emissions, energy consumption, and real GDP for 12 Middle East and North African Countries (MENA) over the period 1981–2005. Our results show that in the long-run energy consumption has a positive significant impact on CO2 emissions. More interestingly, we show that real GDP exhibits a quadratic relationship with CO2 emissions for the region as a whole. However, although the estimated long-run coefficients of income and its square satisfy the EKC hypothesis in most studied countries, the turning points are very low in some cases and very high in other cases, hence providing poor evidence in support of the EKC hypothesis. Thus, our findings suggest that not all MENA countries need to sacrifice economic growth to decrease their emission levels as they may achieve CO2 emissions reduction via energy conservation without negative long-run effects on economic growth.

Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds

Abstract: This paper raises basic questions about the process of economic growth. It questions the assumption, nearly universal since Solow's seminal contributions of the 1950s, that economic growth is a continuous process that will persist forever. There was virtually no growth before 1750, and thus there is no guarantee that growth will continue indefinitely. Rather, the paper suggests that the rapid progress made over the past 250 years could well turn out to be a unique episode in human history. The paper is only about the United States and views the future from 2007 while pretending that the financial crisis did not happen. Its point of departure is growth in per-capita real GDP in the frontier country since 1300, the U.K. until 1906 and the U.S. afterwards. Growth in this frontier gradually accelerated after 1750, reached a peak in the middle of the 20th century, and has been slowing down since. The paper is about "how much further could the frontier growth rate decline?" The analysis links periods of slow and rapid growth to the timing of the three industrial revolutions (IR's), that is, IR #1 (steam, railroads) from 1750 to 1830; IR #2 (electricity, internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals, petroleum) from 1870 to 1900; and IR #3 (computers, the web, mobile phones) from 1960 to present. It provides evidence that IR #2 was more important than the others and was largely responsible for 80 years of relatively rapid productivity growth between 1890 and 1972. Once the spin-off inventions from IR #2 (airplanes, air conditioning, interstate highways) had run their course, productivity growth during 1972-96 was much slower than before. In contrast, IR #3 created only a short-lived growth revival between 1996 and 2004. Many of the original and spin-off inventions of IR #2 could happen only once - urbanization, transportation speed, the freedom of females from the drudgery of carrying tons of water per year, and the role of central heating and air conditioning in achieving a year-round constant temperature. Even if innovation were to continue into the future at the rate of the two decades before 2007, the U.S. faces six headwinds that are in the process of dragging long-term growth to half or less of the 1.9 percent annual rate experienced between 1860 and 2007. These include demography, education, inequality, globalization, energy/environment, and the overhang of consumer and government debt. A provocative "exercise in subtraction" suggests that future growth in consumption per capita for the bottom 99 percent of the income distribution could fall below 0.5 percent per year for an extended period of decades.

The Growing Relationship Between China and Sub-Saharan Africa

Abstract: China’s economic ascendance over the past two decades has generated ripple effects in the world economy. Its search for natural resources to satisfy the demands of industrialization has led it to Sub-Saharan Africa. Trade between China and Africa in 2006 totaled more than $50 billion, with Chinese companies importing oil from Angola and Sudan, timber from Central Africa, and copper from Zambia. Demand from China has contributed to an upward swing in prices, particularly for oil and metals from Africa, and has given a boost to real GDP in Sub-Saharan Africa. Chinese aid and investment in infrastructure are bringing desperately needed capital to the continent. At the same time, however, strong Chinese demand for oil is contributing to an increase in the import bill for many oil-importing Sub- Saharan African countries, and its exports of low-cost textiles, while benefiting African consumers, is threatening to displace local production. China poses a challenge to good governance and macroeconomic management ...

A Panel Data Approach for Program Evaluation — Measuring the Benefits of Political and Economic Integration of Hong Kong with Mainland China

Abstract: SUMMARY We propose a simple-to-implement panel data method to evaluate the impacts of social policy. The basic idea is to exploit the dependence among cross-sectional units to construct the counterfactuals. The cross-sectional correlations are attributed to the presence of some (unobserved) common factors. However, instead of trying to estimate the unobserved factors, we propose to use observed data. We use a panel of 24 countries to evaluate the impact of political and economic integration of Hong Kong with mainland China. We find that the political integration hardly had any impact on the growth of the Hong Kong economy. However, the economic integration has raised Hong Kong's annual real GDP by about 4%. Copyright © 2011 John Wiley & Sons, Ltd.

Benchmarking across Borders: Electoral Accountability and the Necessity of Comparison

Abstract: When the economy in a single country contracts, voters often punish the government. When many economies contract, voters turn against their governments much less frequently. This suggests that the international context matters for the domestic vote, yet most research on electoral accountability assumes that voters treat their national economies as autarkic. We decompose two key economic aggregates—growth in real gross domestic product and unemployment—into their international and domestic components and demonstrate that voters hold incumbents more electorally accountable for the domestic than for the international component of growth. Voters in a wide variety of democracies benchmark national economic growth against that abroad, punishing (rewarding) incumbents for national outcomes that underperform (outperform) an international comparison. Tests suggest that this effect arises not from highly informed voters making direct comparisons but from “pre-benchmarking” by the media when reporting on the economy. The effect of benchmarked growth exceeds that of aggregate national growth by up to a factor of two and outstrips the international component of growth by an even larger margin, implying that previous research may have underestimated the strength of the economy on the vote.

Inflation and Economic Growth

Abstract: Data for around 100 countries from 1960 to 1990 are used to assess the effects of inflation on economic performance. If a number of country characteristics are held constant, then regression results indicate that the impact effects from an increase in average inflation by 10 percentage points per year are a reduction of the growth rate of real per capita GDP by 0.2-0.3 percentage points per year and a decrease in the ratio of investment to GDP by 0.4-0.6 percentage points. Since the statistical procedures use plausible instruments for inflation, there is some reason to believe that these relations reflect causal influences from inflation to growth and investment. However, statistically significant results emerge only when high-inflation experiences are included in the sample. Although the adverse influence of inflation on growth looks small, the long-term effects on standards of living are substantial. For example, a shift in monetary policy that raises the long-term average inflation rate by 10 percentage points per year is estimated to lower the level of real GDP after 30 years by 4-7%, more than enough to justify a strong interest in price stability.

Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds

Abstract: This paper raises basic questions about the process of economic growth. It questions the assumption, nearly universal since Solow's seminal contributions of the 1950s, that economic growth is a continuous process that will persist forever. There was virtually no growth before 1750, and thus there is no guarantee that growth will continue indefinitely. Rather, the paper suggests that the rapid progress made over the past 250 years could well turn out to be a unique episode in human history. The paper is only about the United States and views the future from 2007 while pretending that the financial crisis did not happen. Its point of departure is growth in per-capita real GDP in the frontier country since 1300, the U.K. until 1906 and the U.S. afterwards. Growth in this frontier gradually accelerated after 1750, reached a peak in the middle of the 20th century, and has been slowing down since. The paper is about "how much further could the frontier growth rate decline?"The analysis links periods of slow and rapid growth to the timing of the three industrial revolutions (IR's), that is, IR #1 (steam, railroads) from 1750 to 1830; IR #2 (electricity, internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals, petroleum) from 1870 to 1900; and IR #3 (computers, the web, mobile phones) from 1960 to present. It provides evidence that IR #2 was more important than the others and was largely responsible for 80 years of relatively rapid productivity growth between 1890 and 1972. Once the spin-off inventions from IR #2 (airplanes, air conditioning, interstate highways) had run their course, productivity growth during 1972-96 was much slower than before. In contrast, IR #3 created only a short-lived growth revival between 1996 and 2004. Many of the original and spin-off inventions of IR #2 could happen only once - urbanization, transportation speed, the freedom of females from the drudgery of carrying tons of water per year, and the role of central heating and air conditioning in achieving a year-round constant temperature.Even if innovation were to continue into the future at the rate of the two decades before 2007, the U.S. faces six headwinds that are in the process of dragging long-term growth to half or less of the 1.9 percent annual rate experienced between 1860 and 2007. These include demography, education, inequality, globalization, energy/environment, and the overhang of consumer and government debt. A provocative "exercise in subtraction" suggests that future growth in consumption per capita for the bottom 99 percent of the income distribution could fall below 0.5 percent per year for an extended period of decades.

Assessing the Economy‐wide Effects of Quantitative Easing

Abstract: This article examines the macroeconomic impact of the first round of quantitative easing (QE) by the Bank of England. We attempt to quantify the effects of these purchases by focusing on the impact of lower long-term interest rates on the wider economy. We use three different models to estimate the impact of QE on output and inflation: a large Bayesian vector autoregression (VAR), a change-point structural VAR and a time-varying parameter VAR. Our estimates suggest that QE may have had a peak effect on the level of real GDP of around and a peak effect on annual CPI inflation of about % points.

Do Oil Prices Help Forecast U.S. Real GDP? The Role of Nonlinearities and Asymmetries

Abstract: There is a long tradition of using oil prices to forecast U.S. real GDP. It has been suggested that the predictive relationship between the price of oil and one-quarter-ahead U.S. real GDP is nonlinear in that (a) oil price increases matter only to the extent that they exceed the maximum oil price in recent years, and that (b) oil price decreases do not matter at all. We examine, first, whether the evidence of in-sample predictability in support of this view extends to out-of-sample forecasts. Second, we discuss how to extend this forecasting approach to higher horizons. Third, we compare the resulting class of nonlinear models to alternative economically plausible nonlinear specifications and examine which aspect of the model is most useful for forecasting. We show that the asymmetry embodied in commonly used nonlinear transformations of the price of oil is not helpful for out-of-sample forecasting; more robust and often more accurate real GDP forecasts are obtained from symmetric nonlinear models based ...

Tourism Development and Economic Growth in Seven Mediterranean Countries: A Panel Data Approach:

Abstract: This paper examines the relationship between economic growth and tourism development in seven Mediterranean countries. The purpose is to investigate empirically the long-run relationship between economic growth and tourism development in a multivariate model with tourism real receipts per capita, the number of international tourist arrivals per capita, real effective exchange rate, and real GDP per capita using the new heterogeneous panel cointegration technique. In pursuit of this objective, the tests of panel cointegration and fully modified ordinary least squares (FMOLS) are conducted, using panel data. The data used in this study are annual, covering the period 1980–2007.

Loan Supply Shocks and the Business Cycle

Abstract: This paper provides empirical evidence on the role played by loan supply shocks over the business cycle in the Euro Area, the United Kingdom and the United States from 1980 to 2010 by applying a time-varying parameters VAR model with stochastic volatility and identifying these shocks with sign restrictions. The evidence suggests that loan supply shocks appear to have a significant effect on economic activity and credit market variables, but to some extent also inflation, in all three economic areas. Moreover, we report evidence that the short-term impact of these shocks on real GDP and loan volumes appears to have increased in all three economic areas over the past few years. The results of the analysis also suggest that the impact of loan supply shocks seems to be particularly important during slowdowns in economic activity. As regards to the most recent recession, we find that the contribution of these shocks can explain about one half of the decline in annual real GDP growth during 2008 and 2009 in the Euro Area and the United States and possibly about three fourths of that observed in the United Kingdom. Finally, the contribution of loan supply shocks to the decline in the annual growth rate of loans observed from the peaks of 2007 to the troughs of 2009/2010 was slightly less than half of the total decline in the Euro Area and the United States and somewhat more than half of that in the United Kingdom.

Distortions in the International Migrant Labor Market: Evidence from Filipino Migration and Wage Responses to Destination Country Economic Shocks †

Abstract: The authors use an original panel dataset of migrant departures from the Philippines to identify the responsiveness of migrant numbers and wages to gross domestic product (GDP) shocks in destination countries. The authors find a large, significant response of migrant numbers to GDP shocks at destination, but no significant wage response. This is consistent with binding minimum wages for migrant labor. This result implies that labor market imperfections that make international migration attractive also make migrant flows more sensitive to global business cycles. Difference-in-differences analysis of a minimum wage change for maids confirms that minimum wages bind and demand is price sensitive without these distortions.

Information and Communication Technology Use and Economic Growth

Abstract: In recent years, progress in information and communication technology (ICT) has caused many structural changes such as reorganizing of economics, globalization, and trade extension, which leads to capital flows and enhancing information availability. Moreover, ICT plays a significant role in development of each economic sector, especially during liberalization process. Growth economists predict that economic growth is driven by investments in ICT. However, empirical studies on this issue have produced mixed results, regarding to different research methodology and geographical configuration of the study. This paper examines the impact of Information and Communication Technology (ICT) use on economic growth using the Generalized Method of Moments (GMM) estimator within the framework of a dynamic panel data approach and applies it to 159 countries over the period 2000 to 2009. The results indicate that there is a positive relationship between growth rate of real GDP per capita and ICT use index (as measured by the number of internet users, fixed broadband internet subscribers and the number of mobile subscription per 100 inhabitants). We also find that the effect of ICT use on economic growth is higher in high income group rather than other groups. This implies that if these countries seek to enhance their economic growth, they need to implement specific policies that facilitate ICT use.

Determinants of Non Performing Loans: Case of US Banking Sector

Abstract: Non Performing Loan Rate is the most important issue for banks to survive. There are lots of factors responsible for this ratio. Some of them belong to firm level issues and some are from macroeconomic measures. However this study is based on the blend. It considers the Real GDP per Capita, Inflation, and Total Loans as independent variables, and Non Performing Loan Ratio as dependent variable. Study uses the data of US banking sector from official web sources of US Federal Reserve System. Years from 1985 to 2010 constitute the study period. Employing correlation and regression tests show that research model used is of good statistical health. All the selected independent variables have significant impact on the depended variable, however, values of coefficients are not much high. Banks should control and amend their credit advancement policy with respect to mentioned variables to have lower non-performing loan ratio.

Tourism development and economic growth in developing countries

Abstract: The objective of this study is to investigate the relationships between tourism development and economic growth in developing countries using the newly developed heterogeneous panel cointegration technique. This study examines the causal relationship between tourism development and economic growth using Granger causality tests in a multivariate model and using the annual data for the 1995–2009 period. The study finds no evidence to support the tourism-led growth hypothesis. The results of the FMOLS show that, though the elasticity of tourism revenue with respect to real GDP is not statistically significant for all regions, its positive sign indicates that tourism revenue makes a positive contribution to economic growth in developing countries. The results of the study suggest that governments of developing countries should focus on economic policies to promote tourism as a potential source of economic growth. JEL: F43, L83, O40

Fiscal policy and the Great Recession in the Euro Area

Abstract: How much did fiscal policy contribute to euro area real GDP growth during the Great Recession? We estimate that discretionary fiscal measures have increased annualized quarterly real GDP growth during the crisis by up to 1.6 percentage points. We obtain our result by using an extended version of the European Central Bank’s New Area-Wide Model with a rich specification of the fiscal sector. A detailed modeling of the fiscal sector and the incorporation of as many as eight fiscal time series appear pivotal for our result.

Climate change and economic growth: impacts and interactions

Abstract: An integrated assessment model (ENVISAGE), including a CGE-based economic module and a climate module, is used to assess the effects of a variety of economic impacts induced by climate change. These impacts include: sea level rise, variations in crop yields, water availability, human health, tourism, energy demand. Two scenarios are compared: a baseline growth path, disregarding any climate change effect, and a counterfactual case, accounting for the impacts. The model assesses the overall magnitude of the impacts, their regional distribution, and the contribution of each specific impact to the overall variation of income and welfare. Results (e.g., on real GDP) show that climate change impacts are substantial, especially for developing countries and in the long run.

Developing a comprehensive time series of GDP per capita for 210 countries from 1950 to 2015

Abstract: Income has been extensively studied and utilized as a determinant of health. There are several sources of income expressed as gross domestic product (GDP) per capita, but there are no time series that are complete for the years between 1950 and 2015 for the 210 countries for which data exist. It is in the interest of population health research to establish a global time series that is complete from 1950 to 2015. We collected GDP per capita estimates expressed in either constant US dollar terms or international dollar terms (corrected for purchasing power parity) from seven sources. We applied several stages of models, including ordinary least-squares regressions and mixed effects models, to complete each of the seven source series from 1950 to 2015. The three US dollar and four international dollar series were each averaged to produce two new GDP per capita series. Nine complete series from 1950 to 2015 for 210 countries are available for use. These series can serve various analytical purposes and can illustrate myriad economic trends and features. The derivation of the two new series allows for researchers to avoid any series-specific biases that may exist. The modeling approach used is flexible and will allow for yearly updating as new estimates are produced by the source series. GDP per capita is a necessary tool in population health research, and our development and implementation of a new method has allowed for the most comprehensive known time series to date.

The Impact of the Nigerian Capital Market on Economic Growth (1990-2010)

Abstract: This paper seeks to examine the impact of the Nigerian capital market on its economic growth from the period of 1990-2010. This means that the performance of the stock market is an impetus for economic growth and development. The economic growth was proxied by Gross Domestic Product (GDP) while the capital market variables considered include; Market Capitalization (MCAP), Total New Issues (TNI), Value of Transactions (VLT), and Total Listed Equities and Government Stocks (LEGS). Applying Johansen co-integration and Granger causality tests, results show that the Nigerian capital market and economic growth are co-integrated. This implies that a long run relationship exists between capital market and economic growth in Nigeria. The causality test results suggest a bidirectional causation between the GDP and the value of transactions (VLT) and a unidirectional causality from Market capitalisation to the GDP and not vice versa. The F statistics is significant at 5 percent using a two-tailed test. On the other hand, there is no “reverse causation” from GDP to market capitalization. Furthermore, there is independence “no causation” between the GDP and total new issues (TNI) as well as GDP and LEGS. This is a clear indication of the relative positive impact the capital market plays on the economic growth of the country. The evidence from this study reveals that the activities in the capital market tend to impact positively on the economy. It is recommended therefore that the regulatory authority should initiate policies that would encourage more companies to access the market and also be more proactive in their surveillance role in order to check sharp practices which undermine market integrity and erode investors’ confidence.

Effect of Inflation on the Growth and Development of the Nigerian Economy (An Empirical Analysis)

Abstract: This paper investigates the impact of inflation on economic growth and development in Nigeria between 19702010 through the application of Augmented Dickey-Fuller technique in testing the unit root property of the series and Granger causality test of causation between GDP and inflation. The results of unit root suggest that all the variables in the model are stationary and the results of Causality suggest that GDP causes inflation and not inflation causing GDP. The results also revealed that inflation possessed a positive impact on economic growth through encouraging productivity and output level and on evolution of total factor productivity. A good performance of an economy in terms of per capita growth may therefore be attributed to the rate of inflation in the country. A major policy implication of this result is that concerted effort should be made by policy makers to increase the level of output in Nigeria by improving productivity/supply in order to reduce the prices of goods and services (inflation) so as to boost the growth of the economy. Inflation can only be reduced to the barest minimum by increasing output level (GDP).

Convergence and Modernization Revisited

Abstract: In an 80-country panel since the 1960s, the convergence rate for per capita GDP is around 1.7% per year. This "beta convergence" is conditional on an array of explanatory variables that hold constant countries' long-run characteristics. The introduction of country fixed effects generates a much higher-and, I argue, misleading-convergence rate. In a much longer time frame-34 countries with GDP data starting between 1870 and 1896-estimation with country fixed effects is more appropriate, and the estimated convergence rate is around 2.4% per year. Combining the point estimates from the post-1960s and post-1870 panels suggests that the conditional convergence rate is between 1.7% and 2.4% per year, an interval that contains the "iron-law" rate of 2%. In the post-1960s panel, estimation without country fixed effects supports the modernization hypothesis, in the form of positive effects of per capita GDP and schooling on democracy and maintenance of law and order. The long-term panel with country fixed effects also supports modernization, in the sense of positive effects of per capita GDP and schooling on the Polity indicator for democracy. A measure of dispersion-the standard deviation of the log of per capita GDP across 25 countries-is reasonably stable since 1870. This lack of "sigma convergence" is consistent with the presence of beta convergence. For 34 countries-including China and India-observed since 1896, the dispersion of per capita GDP declines since the late 1970s, especially when the country data are weighted by population. This sigma convergence reflects particularly the incorporation of China and India into the world market economy. For 29 countries since 1919, the levels and trends in cross-country dispersion are similar for consumption and GDP.

Investment-Led Growth in China: Global Spillovers

Abstract: Over the past decade, China's growth model has become more reliant on investment and its footprint in global imports has widened substantially. Several economies within China's supply chain are increasingly exposed to its investment-led growth and face growing risks from a deceleration in investment in China. This note quantifies potential global spillovers from an investment slowdown in China. It finds that a one percentage point slowdown in investment in China is associated with a reduction of global growth of just under one-tenth of a percentage point. The impact is about five times larger than in 2002. Regional supply chain economies and commodity exporters with relatively less diversified economies are most vulnerable to an investment slowdown in China. The spillover effects also register strongly across a range of macroeconomic, trade, and financial variables among G20 trading partners.