Search results for "macroeconomics"

A rationale for macroeconomic policy coordination: Evidence based on the Spanish peseta

1995

Abstract In the present paper two types of monetary model for the determination of the peseta/DM exchange rate have been specified for the period 1980–1989. One includes the fundamental variables corresponding to the two countries concerned (Germany and Spain) and the other is an aggregate model, where the explanatory variables are the ratios between the fundamentals from the countries inside the ERM of the EMS, and the Spanish fundamentals. The empirical results show that the aggregate model has greater explanatory power, supporting (indirectly) further monetary policy coordination.

Disaggregate Real Exchange Rate Behaviour

2007

In this paper, we re-examine the “PPP Puzzle” using sectoral disaggregated data. Specifically, we first analyse the mean reversion speeds of real exchange rates for a number of different sectors in eleven industrial economies and then focus on relating these rates to variables identified in the literature as key determinants of CPI-based real exchange rates, namely: the trade balance, productivity and the mark up. In particular, we seek to understand to what extent the relationships existing at the aggregate level are borne out at the disaggregate level. We believe that this analysis can help shed light on the PPP puzzle.

Long-Run Growth and Volatility: Which Source Really Matters

2010

The aim of the article is to analyse the relationship between long-run growth and business cycle volatility. In particular, the main purpose of this article is to identify which source of volatility is most detrimental to growth. Using cross-country data from 1970 to 2000, and several indicators of volatility (such as inflation, exchange rate, government expenditure, output and investment volatility) this article shows that although, all these measures of volatility are remarkably harmful for growth, business cycle investment volatility is the main source that hampers long-run growth. This relation is robust to different measures of business cycle, and to different sub-samples of countries.

Evolution of the Global Distribution of Carbon Dioxide: A Finite Mixture Analysis

2015

Economists and environmental policymakers have recently begun advocating a bottom-up approach to climate change mitigation, focusing on reduction targets for groups of nations, rather than large scale global policies. We advance this discussion by taking a quantitative perspective, focusing on econometric identification of groups of countries that have statistically similar distributions of carbon emissions using a broad range of finite mixture models. Nearly all of our results yield a consistent pattern: after 1980, there are two distinct emissions distributions, and that these distributions continue to evolve over time. We provide a rigorous analysis of these distributional differences al…

Is the budget deficit sustainable when fiscal policy is non-linear? The case of Spain

2006

In this paper, we re-examine the long-run sustainability of budget deficits, when fiscal policy is conducted as a non-linear process. Our empirical methodology makes use of recent developments on threshold cointegration that consider the possibility of a non-linear relationship between government expenditures and revenues. The analysis is applied to the case of Spain, a country that has recently accomplished an important fiscal consolidation. Overall, our results suggest the presence of significant non-linear effects in Spanish fiscal policy, so that fiscal authorities would cut deficits only if they are ‘large’, which would assure in turn their long-run sustainability.

Deficit sustainability, and monetary versus fiscal dominance: The case of Spain, 1850–2000

2014

Abstract In this paper, we provide a test of the sustainability of the Spanish government deficit over the period 1850–2000, emphasizing the role played by monetary and fiscal dominance in order to get fiscal solvency. Since the condition of fiscal solvency was satisfied, government deficit would have been sustainable along the sample period. In addition, the whole period can be characterized as one of fiscal dominance.

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 …