Showing papers on "Real gross domestic product published in 2015"

The Next Generation of the Penn World Table

Abstract: We describe the theory and practice of real GDP comparisons across countries and over time. Effective with version 8, the Penn World Table (PWT) will be taken over by the University of California, Davis and the University of Groningen, with continued input from Alan Heston at the University of Pennsylvania. Version 8 will expand on previous versions of PWT in three respects. First, it will distinguish real GDP on the expenditure side from real GDP on the output side, which differ by the terms of trade faced by countries. Second, it will distinguish growth rates of GDP based on national accounts data from growth rates that are benchmarked in multiple years to cross-country price data. Third, data on capital stocks will be reintroduced. Some illustrative results from PWT version 8 are discussed, including new results that show how the Penn effect is not emergent but a stable relationship over time.

Causal relationship between CO 2 emissions, real GDP, energy consumption, financial development, trade openness, and urbanization in Tunisia

Abstract: The aim of this paper is to examine the causal relationship between CO2 emissions, real GDP, energy consumption, financial development, trade openness, and urbanization in Tunisia over the period of 1971-2012. The long-run relationship is investigated by the auto-regressive distributed lag (ARDL) bounds testing approach to cointegration and error correction method (ECM). The results of the analysis reveal a positive sign for the coefficient of financial development, suggesting that the financial development in Tunisia has taken place at the expense of environmental pollution. The Tunisian case also shows a positive monotonic relationship between real GDP and CO2 emissions. This means that the results do not support the validity of environmental Kuznets curve (EKC) hypothesis. In addition, the paper explores causal relationship between the variables by using Granger causality models and it concludes that financial development plays a vital role in the Tunisian economy.

Secular Stagnation: A Supply-Side View

Abstract: Secular stagnation on the supply side takes the form of a slow 1.6 percent annual growth rate of US potential real GDP, roughly half the 3.1 percent annual growth rate of actual real GDP realized from 1972 to 2004. This slowdown stems from a sharp decline in the growth rate of aggregate hours of work and of output per hour. This paper attributes the productivity growth decline to diminishing returns in the digital revolution that had its peak effect business hardware, software, and best practices in the late 1990s but has resulted in little change in those methods over the past decade.

The role of renewable energy and agriculture in reducing CO2 emissions: evidence for North Africa countries

Abstract: This paper uses panel cointegration techniques and Granger causality tests to investigate the dynamic causal links between per capita renewable energy consumption, agricultural value added (AVA), carbon dioxide (CO2) emissions, and real gross domestic product (GDP) for a panel of five North Africa countries spanning the period 1980-2011. In the short-run, the Granger causality tests show the existence of a bidirectional causality between CO2 emissions and agriculture, a unidirectional causality running from agriculture to GDP, a unidirectional causality running from GDP to renewable energy consumption, and a unidirectional causality running from renewable energy consumption to agriculture. In the long-run, there is bidirectional causality between agriculture and CO2 emissions, a unidirectional causality running from renewable energy to both agriculture and emissions, and a unidirectional causality running from output to both agriculture and emissions. Long-run parameter estimates show that an increase in GDP and in renewable energy consumption increase CO2 emissions, whereas an increase in agricultural value added reduces CO2 emissions. As policy recommendation, North African authorities should encourage renewable energy consumption, and especially clean renewable energy such as solar or wind, as this improves agricultural production and help to combat global warming.

Biomass energy and economic growth nexus in G7 countries: Evidence from dynamic panel data

Abstract: The purpose of this paper is to reveal the long run dynamics of biomass energy consumption and GDP growth through homogeneous and heterogeneous variance structures for G7 countries. It covers annual data from 1980 to 2009. Panel unit root analyses, panel cointegration analyses, conventional OLS and dynamic OLS analyses are run throughout homogeneous and heterogeneous variance structures of the panel data to examine the relationship. The findings show that the long run elasticities of panel real GDP data in terms of panel capital stock, panel human capital index and panel biomass consumption are significant and positive. The results confirmed the growth hypothesis in which biomass energy consumption have positive effects on economic growth of G7 countries. As a policy implication, energy policies which improve the biomass energy infrastructure and biomass supply are the appropriate options for G7 countries since biomass energy consumption increases the economic growth.

The Role of Renewable Energy Consumption and Trade: Environmental Kuznets Curve Analysis for Sub-Saharan Africa Countries

Abstract: Based on the Environmental Kuznets Curve (EKC) hypothesis, this paper uses panel cointegration techniques to investigate the short and the long-run relationship between CO2 emissions, economic growth, renewable energy consumption and trade openness for a panel of 24 Sub-Saharan Africa countries over the period 1980-2010. The validity of the EKC hypothesis has not been supported for these countries. Short-run Granger causality results reveal that there is a bidirectional causality between emissions and economic growth; bidirectional causality between emissions and real exports; unidirectional causality from real imports to emissions; and unidirectional causality runs from trade (exports or imports) to renewable energy consumption. There is an indirect short-run causality running from emissions to renewable energy and an indirect short-run causality from GDP to renewable energy. In the long-run, the error correction term is statistically significant for emissions, renewable energy consumption and trade openness. The long-run estimates suggest that real GDP per capita and real imports per capita both have a negative and statistically significant impact on per capita CO2 emissions. The impact of the square of real GDP per capita and real exports per capita are both positive and statistically significant on per capita CO2 emissions. For the model with imports, renewable energy consumption per capita has a positive impact on per capita emissions. One policy recommendation is that Sub-Saharan countries should expand their trade exchanges particularly with developed countries and try to maximize their benefit from technology transfer generated by such trade relations as this increases their renewable energy consumption.

Key Determinants of Non-performing Loans: New Evidence from a Global Sample

Abstract: Using a novel panel data set we study the macroeconomic determinants of non-performing loans (NPLs) across 75 countries during the past decade. According to our dynamic panel estimates, the following variables are found to significantly affect NPL ratios: real GDP growth, share prices, the exchange rate, and the lending interest rate. In the case of exchange rates, the direction of the effect depends on the extent of foreign exchange lending to unhedged borrowers which is particularly high in countries with pegged or managed exchange rates. In the case of share prices, the impact is found to be larger in countries which have a large stock market relative to GDP. These results are robust to alternative econometric specifications.

British Economic Growth, 1270-1870

Abstract: We provide annual estimates of GDP for England between 1270 and 1700 and for Great Britain between 1700 and 1870, constructed from the output side. The GDP data are combined with population estimates to calculate GDP per capita. We find English per capita income growth of 0.20 per cent per annum between 1270 and 1700, although growth was episodic, with the strongest growth during the Black Death crisis of the fourteenth century and in the second half of the seventeenth century. For the period 1700-1870, we find British per capita income growth of 0.48 per cent, broadly in line with the widely accepted Crafts/Harley estimates. This modest trend growth in per capita income since 1270 suggests that, working back from the present, living standards in the late medieval period were well above “bare bones subsistence”. This can be reconciled with modest levels of kilocalorie consumption per head because of the very large share of pastoral production in agriculture.

The Global Trade Slowdown: Cyclical or Structural?

Abstract: This paper focuses on the sluggish growth of world trade relative to income growth in recent years. The analysis uses an empirical strategy based on an error correction model to assess whether the global trade slowdown is structural or cyclical. An estimate of the relationship between trade and income in the past four decades reveals that the long-term trade elasticity rose sharply in the 1990s, but declined significantly in the 2000s even before the global financial crisis. These results suggest that trade is growing slowly not only because of slow growth of Gross Domestic Product (GDP), but also because of a structural change in the trade-GDP relationship in recent years. The available evidence suggests that the explanation may lie in the slowing pace of international vertical specialization rather than increasing protection or the changing composition of trade and GDP.

Renewable Energy, Output, Carbon Dioxide Emissions, and Oil Prices: Evidence from South America

Abstract: This study utilizes panel cointegration techniques to estimate the long-run relationship as well as the causal dynamics between renewable energy consumption per capita, real gross domestic product (GDP) per capita, carbon dioxide emissions per capita, and real oil prices for a panel of 11 South American countries over the period 1980 to 2010. Specifically, we find the long-run elasticity estimates are positive and statistically significant with respect to real GDP per capita, carbon emissions per capita, and real oil prices. The results of the panel error correction model reveal a feedback relationship among the variables in question, indicative of the importance of renewable energy consumption in both the growth of output and the containment of carbon dioxide emissions.

Natural gas consumption and economic growth nexus: Panel data analysis for GCC countries

Abstract: This study investigates the relationship between natural gas energy consumption and economic growth by including trade openness, total labor force and gross fixed capital formation as a major determinants of GDP growth within the multivariate framework model in Gulf Cooperation Council (GCC) countries. A panel GDP model is constructed taking the period of 1980–2012. The result revealed that natural gas energy consumption is cointegrated with GDP growth in the investigated countries. In addition, based on the panel dynamic ordinary least square (DOLS) and the fully modified ordinary least square (FMOLS), this study concluded that the natural gas energy consumption affects the GCC’s countries GDP growth positively in the long run. Furthermore, the results from the Granger causality test revealed bidirectional causality between natural gas energy consumption and GDP growth which confirms the feedback hypothesis. From the outcome of this research, a number of policy implications were provided for the GCC countries.

Regional resilience across Europe: On urbanisation and the initial impact of the Great Recession

Abstract: Using a novel data set for 207 European regions from 22 different countries, we analyse the relevance of urbanisation for the short-term resilience to a major shock. We take the Great Recession, the economic and financial crisis that started in 2008, as our shock and analyse how the European NUTS 2 regions differ in their short-run resilience in the aftermath to the crisis in terms of unemployment and real GDP per capita. We find that the degree and nature of regional urbanisation is important for resilience. EU regions with a relatively large share of the population in commuting areas are relatively more resilient. In addition, regions with a large output share in medium-high tech industries were also less affected by the crisis.

Impact of oil price shocks on output, inflation and the real exchange rate: evidence from selected ASEAN countries

Abstract: This article analyses the impact of oil price shocks on real output, inflation and the real exchange rate in Thailand, Malaysia, Singapore, the Philippines and Indonesia (ASEAN-5) using a Structural VAR model. The cointegration tests indicate that the macroeconomic variables of these countries are cointegrated and share common trends in the long run. The impulse response functions reveal that oil price fluctuations do not impact the ASEAN-5 economies in the long run and much of its effect is absorbed within five to six quarters. The variance decomposition results further assert that with a few exceptions oil price shocks do not explain a significant variation in any of the variables under consideration. We also identify a very unique pattern of response to oil price fluctuations between Malaysia and Singapore and between the Philippines and Thailand. The pairs exhibit a high degree of similarity in their responses; they do not share any commonalities across the group.

What Drives Foreign Direct Investments into West Africa? An Empirical Investigation

Abstract: This paper analyzed drivers of foreign direct investments (FDI) to West Africa using a panel dataset from 1970 to 2010. OLS and GMM techniques are used for the estimations. The main results indicate that there is a U-shaped relationship between economic development and FDI inflows to West Africa. In summary: (i) The quadratic element of real per capita GDP, domestic investment, trade openness, first year lag of FDI, natural resources (oil and metals) endowment and exports, and monetary integration have positive and significant effect on FDI inflows to West Africa; and (ii) there is a negative relationship between FDI inflows to the sub-region and loan component of ODA, economic growth, level of economic development (real GDP per capita), life expectancy, and domestic credit to the private sector.

A Strategy for Resolving Europe's Problem Loans

Abstract: Europe’s banking system is weighed down by high levels of non-performing loans (NPLs), which are holding down credit growth and economic activity. This discussion note uses a new survey of European country authorities and banks to examine the structural obstacles that discourage banks from addressing their problem loans. A three pillared strategy is advocated to remedy the situation, comprising: (i) tightened supervisory policies, (ii) insolvency reforms, and (iii) the development of distressed debt markets.

Regional GDP in the UK, 1861–1911: new estimates

Abstract: This article compares the Geary–Stark method for distributing known GDP totals across regions with a variation suggested by Crafts. Tests of the Geary–Stark method confirm that it generates accurate estimates of regional GDP. There are practical and conceptual problems with Crafts' extension, and it is not tested nor is it testable. New estimates of regional GDP for the period 1861 to 1911 contradict Crafts's suggestion of rising regional inequality. Purchasing power parity adjustments do not alter this trend. The new estimates confirm Ireland's post-Famine catch-up. The great bulk of Irish labour productivity growth can be accounted for by an upward shifting production function, though it can be argued that that portion of growth that represents catch-up may be attributable to labour force decline.

Does Renewable Energy Consumption and Health Expenditure Decrease Carbon Dioxide Emissions? Evidence for sub-Saharan Africa Countries

Abstract: This paper employs a number of panel methodological approaches to explore the link between per capita carbon dioxide emissions, per capita real income, renewable energy consumption and health expenditures for a panel of 42 sub-Saharan African countries, spanning the period 1995-2011. The empirical findings provide supportive of a long-run relationship among the variables. Granger causality reveals the presence of a short-run unidirectional causality running from real GDP to CO2 emissions, a bidirectional causality between renewable energy consumption and CO2 emissions, a unidirectional causality running from real GDP to renewable energy consumption, and a unidirectional causality running from real GDP to heath expenditure, while long-run estimates document that both renewable energy consumption and health expenditures contribute to the reduction of carbon emissions, while real GDP leads to the increase of emissions in these countries. The results are expected to be of high importance for policymakers in the region. Both renewable energy consumption and expansionary health expenditures are the major drivers of pollution declines. In that sense the findings imply that a substantial part of the state budget in relevance to health expenditures would be a good path to combat global warming in these countries.

Ethiopia’s great run : the growth acceleration and how to pace it

Abstract: This report addresses two questions: what explains Ethiopia’s growth acceleration?; and how can it be sustained? In brief, the authors find that Ethiopia’s rapid economic growth, concentrated in agriculture and services, was driven by substantial public infrastructure investment and supported by a conducive external environment. To sustain high growth, three policy adjustments are presented: identifying sustainable ways of financing infrastructure, supporting private investment through credit markets, and tapping into the growth potential of structural reforms.

Country-Specific Oil Supply Shocks and the Global Economy: A Counterfactual Analysis

Abstract: This paper investigates the global macroeconomic consequences of country-specific oil-supply shocks. Our contribution is both theoretical and empirical. On the theoretical side, we develop a model for the global oil market and integrate this within a compact quarterly model of the global economy to illustrate how our multi-country approach to modelling oil markets can be used to identify country-specific oil-supply shocks. On the empirical side, estimating the GVAR-Oil model for 27 countries/regions over the period 1979Q2 to 2013Q1, we show that the global economic implications of oil-supply shocks (due to, for instance, sanctions, wars, or natural disasters) vary considerably depending on which country is subject to the shock. In particular, we find that adverse shocks to Iranian oil output are neutralized in terms of their effects on the global economy (real outputs and financial markets) mainly due to an increase in Saudi Arabian oil production. In contrast, a negative shock to oil supply in Saudi Arabia leads to an immediate and permanent increase in oil prices, given that the loss in Saudi Arabian production is not compensated for by the other oil producers. As a result, a Saudi Arabian oil supply shock has significant adverse effects for the global economy with real GDP falling in both advanced and emerging economies, and large losses in real equity prices worldwide.

Causality between Exports and Economic Growth in South Africa: Evidence from Linear and Nonlinear Tests

Abstract: This paper investigates the dynamic causal link between exports and economic growth using both linear and nonlinear Granger causality tests. We use annual South African data on real exports and real gross domestic product from 1911-2011. The linear Granger causality result shows no evidence of significant causality between exports and GDP. The relevant VAR is unstable, which undermines our confidence in the causality result identified by the linear Granger causality test. Accordingly we turn to the nonlinear methods to evaluate Granger causality between exports and GDP. First, we use Hiemstra and Jones (1994) nonlinear Granger causality test and find a unidirectional causality from GDP to exports. However, using a more powerful and less biased nonlinear test, the Diks and Panchenko (2006) test, we find evidence of significant bi-directional causality. These results highlight the risk of misleading conclusions based on the standard linear Granger causality tests which neither accounts for structural breaks nor uncover nonlinearities in the dynamic relationship between exports and GDP.

Economic growth, CO2 emissions and energy use in Israel

Abstract: This paper analyses the relationship among economic growth, energy use and carbon dioxide (CO2) emissions in Israel over the period 1971–2006. Results of unit root tests show that all variables are integrated of order one. Causality results suggest that real gross domestic product (GDP) drives both energy use and CO2 emissions. Forecast error variance decompositions (FEVDs) evidence that the errors in real per capita GDP are mainly due to uncertainty in GDP itself, while the errors in predicting the energy consumption and the CO2 emissions are sensitive to disturbances in the other two equations. The FEVDs show that forecast errors in real per capita GDP are mainly due to uncertainty in GDP itself, the errors in predicting the energy use are sensitive to disturbances both in the GDP and in CO2 equations, while the forecast errors in CO2 emissions should be essentially connected to emissions itself. Finally, the vector autoregression (VAR) forecast represents an improvement in simpler forecasts in more tha...

The Impact of the Euro on Euro Area GDP Per Capita

Abstract: This paper poses the following question: what would euro area GDP per capita have been, had the monetary union not been launched? To this end we use the synthetic control methodology. We find that the euro did not bring the expected jump to a permanent higher growth path. During the early years of the monetary union, aggregate GDP per capita in the euro area rose slightly above the path predicted by its counterfactual; but since the mid-2000s, these gains have been completely eroded. Central European countries – Germany, the Netherlands and Austria – did not seem to obtain any gains or losses from the adoption of the euro. Ireland, Spain and Greece registered positive and significant gains, but only during the expansionary years that followed the launch of the euro, while Italy and Portugal quickly lagged behind the GDP per capita predicted by their counterfactual. We test the robustness of the synthetic estimation not only to the exclusion of any particular country from the donor pool but also to the omission of each of the selected determinants of GDP per capita and to the reduction of the dimensions in the optimisation programme, namely the number of GDP determinants.