Search results for "Macroeconomic"

Fiscal impact of the migration phenomenon

2019

Threshold cointegration and nonlinear adjustment between CO2 and income: The Environmental Kuznets Curve in Spain, 1857–2007

2012

abstract Article history:Received 9 March 2011Received in revised form 24 February 2012Accepted 2 March 2012Available online 14 March 2012JEL classification:C2Q4Keywords:Environmental Kuznets CurveCO 2 emissionsNonlinear relationshipThreshold cointegration Inthispaper wemodelthe long-run relationship between per capita CO 2 and per capita income for the Spanisheconomy over the period 1857–2007. According to the Environmental Kuznets Curve (ECK) the relationshipbetween the two variables has an inverted-U shape. However, previous studies for the Spanish economy onlyconsidered the existence of linear relationships. Such an approach may lack flexibility to detect the trueshape of the relationship…

The shadow price of foreign exchange with minimum wages

2001

Abstract This note derives the shadow price of foreign exchange in a small open economy with minimum wage unemployment under tariffs, quotas and voluntary export restraints. The analysis is conducted in a dual general equilibrium framework with many goods and factors.

Catching-up to foreign technology? Evidence on the “Veblen–Gerschenkron” effect of foreign investments

2006

Abstract The presence of foreign multinational enterprises may benefit local economies. In particular, highly productive foreign-owned firms may promote the technological catch-up of local firms. This channel of spillovers is defined as the “Veblen–Gerschenkron” effect of foreign direct investment and is analyzed in this article. Rather than the overall concentration of foreign-owned plants in a region or sector, it is their productivity advantage that determines the positive effect on domestic firms in geographical and technological proximity. We test this hypothesis using new firm-level data for German and Italian manufacturing firms during the 1990s. These two countries are particularly …

Fiscal sustainability in EMU countries: A continued fiscal commitment?

2017

Abstract The aim of this paper is to study the sustainability of public finances in the Eurozone particularly after the 2007 financial crisis. This paper goes beyond the standard analysis of the univariate properties of the fiscal variables through the estimation of a time-varying fiscal reaction function on a 11-country panel for a period spanning from 1970 to 2014. Even if panel unit root or stationary tests may provide a rough first insight on the sustainability of the public finances, they fail to highlight the adjustment mechanisms to debt overhang in recent years. The main advantage of our empirical approach is that it clearly captures the government’s dynamic response to debt accumul…

How best to measure discretionary fiscal policy? Assessing its impact on private spending

2013

We develop a novel empirical approach to assess the effect of discretionary fiscal policy on private spending consisting of three stages: 1) extract the discretionary component of fiscal policy by estimating a fiscal policy rule; 2) use the residuals of the first-stage regression to investigate the existence of crowding-in and/or crowding-out effects both in the short and the medium term; and 3) condition the response of private spending on a set of country characteristics. We find that an expansion in discretionary fiscal policy boosts growth in the short term, but is detrimental in the medium term. In addition, the empirical findings suggest that the effect of discretionary fiscal policy …

Balance of payments crises and fiscal adjustment measures

1991

A model with optimizing firms and consumers is used to explore the effects of unannounced and preannounced fiscal adjustment policies that are intended to prevent an impending balance of payments crisis. It is shown that preannouncement unambiguously raises the required fiscal adjustment effort so that, from the government's point of view, “cold turkey” is the preferable policy. The effect of preannouncement on the private sector's adjustment cost is ambiguous since preannouncement induces an externality which may either benefit or harm the private sector, depending on the nature of the measure that is preannounced.

FINANCIAL MARKETS' SHUTDOWN AND REACCESS

2017

We employ a discrete-time parametric duration model on a group of 121 countries over the period 1970–2011 and find that the probability of the end of financial markets' shutdown and reaccess falls as these events become longer. We also show that: (1) shutdown episodes are longer when economic prospects are poor and the degree of financial openness falls, the chief executive has been in office for long periods, and the country has a default history and (2) spells of reaccess tend to be longer when economic growth improves and financial openness increases, there are neither government crises nor government instability, and the country did not default in the past. (JEL C41, G15)

The effect of the great recession on foreign direct investment: global empirical evidence with a gravity approach

2013

This article estimates the effect of the present global systemic banking crisis on foreign direct investment (FDI) using the gravity equation on a sample of 161 countries over the period 2003 to 2010. Systemic banking crises, through demand shocks and credit constraints, may impact FDI in two ways: aggregate monetary flows and individual projects count. Since gravity equations account for output variations, our research relies on the financial constraints channel. We find that the great recession, through credit constraints on home supply markets, has reduced the number of FDI projects, but not their size, forcing investors to become more selective on their international endeavours.

Revisiting the quiet life hypothesis in banking using nonparametric techniques

2014

Early studies testing the quiet life hypothesis in banking found strong evidence that banks in more concentrated markets exhibit lower cost efficiency levels. More recent studies have reexamined the issue in different contexts, with mixed results. These approaches are based on stipulating a linear re- lationship between market power and efficiency in banking, which might be problematic, as suggested by the literature on efficiency analysis. We explore how bank cost efficiency measures are related to market power using flexible techniques, which are more consistent with those employed to measure efficiency in the first stage of the analysis. Our study focuses on the Spanish banking industry,…