scholarly journals Unraveling News: Reconciling Conflicting Evidence

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Maria Bolboaca ◽  
Sarah Fischer
Keyword(s):  
Technology Diffusion ◽  
Empirical Literature ◽  
Large Set ◽  
Factor Productivity ◽  
News Shocks ◽  
Macroeconomic Variables ◽  
Identification Schemes ◽  
Productivity Measure ◽  
Conflicting Evidence ◽  
News Shock

Abstract This paper addresses the lack of consensus in the empirical literature regarding the effects of technology diffusion news shocks. We attribute the conflicting evidence to the wide diversity in terms of variable settings, productivity series used, and identification schemes applied. We analyze the different identification schemes that have been employed in this literature. More specifically, we impose short- and medium-run restrictions to identify a news shock. The focus is on the medium-run identification maximizing at and over different horizons. We show that the identified news shock depends critically on the applied identification scheme and on the maximization horizon. We also investigate the importance of the information content of the model and of the productivity measure used. We find that models which either contain a large set of macroeconomic variables or include variables that are strongly forward looking deliver more robust results. Moreover, we show that the productivity series used may influence results, but there is convergence of findings for newer total factor productivity series vintages. Our conclusion is that news shocks have expansionary properties.

scholarly journals Protectivity Versus Productivity And Economic Growth: Empirical Evidence From Selected Countries

2011 ◽  
Vol 7 (10) ◽  
Author(s):  
Hamid Shahrestani ◽  
Nahid Kalbasi Anaraki
Keyword(s):  
Economic Growth ◽  
Good Governance ◽  
Country Risk ◽  
Method Of Moment ◽  
Cross Section Data ◽  
Factor Productivity ◽  
Macroeconomic Variables ◽  
Section Data ◽  
Generalized Method Of Moment ◽  
Country Specific

This paper tries to cast light on the effects of terrorism on some macroeconomic variables at the international level. Using the Generalized Method of Moment (GMM) we investigate the effects of terrorism on such variables as GDP growth, foreign direct investment (FDI) and total factor productivity (TFP) with cross section data of 2005 for a sample of both developed and developing countries. The results suggest that terrorism has adversely and significantly affected economic growth, FDI and TFP around the world. In line with Abadie and Gardeazabal (2007) we find that once the effects of other country-specific characteristics such as country risk, good governance, and restrictions on FDI are taken into account these results are still robust.

scholarly journals Can News about the Future Drive the Business Cycle?

2009 ◽  
Vol 99 (4) ◽  
pp. 1097-1118 ◽  
Author(s):  
Nir Jaimovich ◽  
Sergio Rebelo
Keyword(s):  
Adjustment Costs ◽  
Wealth Effects ◽  
Factor Productivity ◽  
News Shocks ◽  
Productivity Shocks ◽  
Macroeconomic Models ◽  
Short Run ◽  
The Business Cycle ◽  
Litmus Test ◽  
Total Factor Productivity Shocks

Aggregate and sectoral comovement are central features of business cycles, so the ability to generate comovement is a natural litmus test for macroeconomic models. But it is a test that most models fail. We propose a unified model that generates aggregate and sectoral comovement in response to contemporaneous and news shocks about fundamentals. The fundamentals that we consider are aggregate and sectoral total factor productivity shocks as well as investment-specific technical change. The model has three key elements: variable capital utilization, adjustment costs to investment, and preferences that allow us to parameterize the strength of short-run wealth effects on the labor supply. (JEL E13, E20, E32)

Financial integration, global liquidity and global macroeconomic linkages

2016 ◽  
Vol 43 (1) ◽  
pp. 16-26 ◽  
Author(s):  
Ansgar Belke ◽  
Jonas Keil
Keyword(s):  
Financial Integration ◽  
Positive Impact ◽  
Commodity Prices ◽  
Global Perspective ◽  
Empirical Literature ◽  
Unified Framework ◽  
Financial Flows ◽  
Content Type ◽  
Macroeconomic Variables ◽  
Global Liquidity

Purpose – The purpose of this paper is to analyse the effect of financial integration on several macroeconomic variables from a global perspective. Design/methodology/approach – The authors apply a cointegrated vector autoregression model using quarterly data for 1980-2009. Analysing the interactions of globally aggregated measures capturing cross-border financial transactions, monetary liquidity, output, consumer and commodity prices, the authors focus on the dissection of short-run and long-run dynamics. Findings – The authors find that increasing financial integration has a positive impact driving GDP. The authors also find evidence of two-way causality between commodity prices and financial flows. The results suggest that commodity prices are driven by financial integration and the gap between the dynamics of commodity prices and financial flows is closed by global liquidity injected by central banks. Originality/value – The paper contributes to the empirical literature by analysing the overall impact of global financial integration and of global liquidity on global macroeconomic variables in a unified framework.

Is Liberalisation Associated with Higher Productivity? A Case Study of Punjab Manufacturing

2007 ◽  
Vol 11 (4) ◽  
pp. 53-65
Author(s):  
Ravi Kiran ◽  
Manpreet Kaur
Keyword(s):  
Economic Growth ◽  
Total Factor Productivity ◽  
Manufacturing Sector ◽  
Research Work ◽  
Value Added ◽  
Business Environment ◽  
Empirical Literature ◽  
Factor Productivity ◽  
Policy Regime ◽  
Indian Economy

Productivity is an important concept in the context of the economic growth of a nation. The rate of productivity in accelerating the pace of economic growth is well recognised in both the theoretical as well as empirical literature on growth. The significance of productivity for economic growth was highlighted by Kuznets (1966) when he showed that rapid gain in industrial productivity was the crucial underpinning of Western Industrialization. The Indian Economy was thrust into throes of rapid change in the nineties when the then government of India adopted the New Economic Policy. Liberalization, Privatization and Globalization — became the three planks by which the Indian Economy was propelled into the fusion. This process has had maximum impact on the manufacturing sector, as it has radically changed its business environment and future growth dynamics. All the states of Indian union have been affected differently due to the structural changes. In response to changed policy regime different sub sectors of industry of Punjab have responded differently to adjust optimally. The present research work focuses on studying the response of manufacturing industries in Punjab to the changed policy regime after the advent of liberalisation and privatisation process in India. The present study analyses the trends in value added, labour, capital as well as trends in labour, capital and total factor productivity for sixteen industrial groups on the organised manufacturing sector for the period 1980 — 81 to 2002 — 03 and also for two sub periods, period I, 1980 — 81 to 1990 — 91 and period II, 1991 — 92 to 2002 — 03. The present study tries to examine the trends in partial productivities as well as total factor productivity in the two sub periods to see whether there has been an improvement in productivity in the post 1991 period, the period associated with liberalisation and globalisation. The study tries to analyse the industries which have been showing better performance in terms of partial and total factor productivity and also study the trends of the industries which have not performed well in the period of analysis.

CONVERGENCE AND DIVERGENCE: A NEW APPROACH, NEW DATA, AND NEW RESULTS

2020 ◽  
pp. 1-34
Author(s):  
Michele Battisti ◽  
Gianfranco di Vaio ◽  
Joseph Zeira
Keyword(s):  
Technology Adoption ◽  
Total Factor Productivity ◽  
Large Set ◽  
Factor Productivity ◽  
New Approach ◽  
Empirical Results ◽  
Growth Regressions ◽  
Convergence And Divergence ◽  
Global Frontier ◽  
Over Time

Recently, Penn World Tables include new data that enable calculation of total factor productivity in addition to output for a large set of countries. We use these new data to examine convergence and divergence across countries by applying a new approach, which differentiates between the dynamics of output and of productivity. Our empirical results lead to two main new contributions to the literature. The first is on the interpretation of “β-convergence” in “growth regressions.” It means that output per worker in each country converges to productivity but does not imply convergence across countries, since productivity tends to diverge from the global frontier. The second contribution is to the literature, which finds that income gaps across countries are due mainly to differential technology adoption. This paper shows that the gaps in technology are not only large but keep growing over time.

scholarly journals Towards Sustainable Development: Measuring Environmental Total Factor Productivity in Egypt

2020 ◽  
Vol 9 (2) ◽  
pp. 55
Author(s):  
Iman Al-Ayouty ◽  
Hoda Hassaballa
Keyword(s):  
Sustainable Development ◽  
Data Envelopment Analysis ◽  
Total Factor Productivity ◽  
Malmquist Index ◽  
Policy Implications ◽  
Empirical Literature ◽  
Data Envelopment ◽  
Factor Productivity ◽  
Development Goals ◽  
Energy Intensive Industries

Egypt’s heavy reliance on energy- and capital-intensive industries currently hinders its drive towards achieving sustainable development goals. This paper studies environmental total factor productivity (ETFP) for ten energy-intensive industries using the Malmquist index and data envelopment analysis (DEA) for the period 2002-2014. Through incorporating CO2 emissions by energy intensive industries, DEA helps identify both environmentally-efficient and inefficient industries. Findings indicate that: i) ETFP has remained almost unchanged for the 10 industries, with ‘technical progress’ improvement almost fully outweighed by an efficiency deterioration, ii) excluding the environmental component indeed yields overestimated total factor productivity (TFP). In its estimation of ETFP, the paper adds to exiting empirical literature since no similar estimation has been done for Egypt. Results may be relevant to other countries with similar industrial structures. Policy implications include the reliance on renewable sources of energy, bearing directly on the achievement of the seventh, ninth and twelfth SDG goals. Keywords: environmental total factor productivity; energy intensive industries; data envelopment analysis; Egypt

Determinants of stock market development: a review of the literature

2017 ◽  
Vol 34 (1) ◽  
pp. 143-164 ◽  
Author(s):  
Sin-Yu Ho ◽  
Bernard Njindan Iyke
Keyword(s):  
Stock Market ◽  
Real Income ◽  
Institutional Factors ◽  
Market Development ◽  
Empirical Literature ◽  
Large Set ◽  
Review Of The Literature ◽  
Macroeconomic Factors ◽  
Content Type ◽  
Stock Market Development

Purpose This paper aims to provide a comprehensive review of the literature on the determinants of stock market development. Design/methodology/approach The paper divides the existing studies into the theoretical and empirical literature. Then, it analyses these studies in turn. Findings Based on the theoretical literature, the determinants of stock market development can be broadly classified into two groups: macroeconomic factors and institutional factors. The theory and the empirics predict different ways in which macroeconomic factors affect stock market development. The real income and its growth rate foster stock market development, while the banking sector, interest rate and private capital flows can foster or inhibit it. Inflation and exchange rates have adverse effects on stock market development. In terms of the institutional factors, the literature indicates that different legal origins and stock market integration can have a positive or negative impact on stock market development. In addition, factors such as legal protection of investors, corporate governance, financial liberalisation and trade openness contribute positively to the development of the stock market. Research limitations/implications From the survey, it is imperative that policies which aim at enhancing institutional quality, financial integration, real income growth, macroeconomic stability and capital inflows, among others, will certainly promote stock market development within and across countries. Although the empirical studies have incorporated a large set of variables in their models, the theoretical studies do not contain rich models of stock market development. It is understandable that a theoretical model which contains a large set of the determinants of stock market development may be difficult to solve. However, such a model seems very appealing and will provide a unification of the existing literature. Originality/value The originality of the paper lies in the fact that it is the first to undertake a survey of the determinants of stock market development in the literature. It is hoped that this paper will spur further theoretical and empirical research on the determinants of stock market development.

scholarly journals The Impact of Financial Development on Investment: a Review of International Literature

2018 ◽  
Vol 9 (2) ◽  
pp. 167-192
Author(s):  
Brian Muyambiri ◽  
Nicholas M. Odhiambo
Keyword(s):  
Empirical Research ◽  
Financial Development ◽  
Empirical Literature ◽  
International Literature ◽  
Macroeconomic Variables ◽  
Development Indicators ◽  
Investment Determinants ◽  
Topical Analysis ◽  
The Impact ◽  
The Relationship

This article summarises the empirical literature on the impact of financial development on investment. It presents a topical analysis of empirical research that focuses mainly on the interaction between financial development and investment, determinants and measurement of both financial development and investment, and empirical findings on the relationship between the two variables under discussion. The study concludes that most of the research done on the relationship between financial development and investment is highly skewed towards assessing the relationship using mostly bank-based financial development indicators, as compared to the market-based financial development indicators. Given the number of studies assessed, the impact of financial development on investment appears to be inconclusive, at best. Moreover, the study shows that the relationship between these two macroeconomic variables seems to differ from country to country; it is dependent on the proxies used to measure the level of financial development, as well as the methodology employed.

scholarly journals The Impact of Financial Development on Investment: A Review of International Literature

2018 ◽  
Vol 9 (2) ◽  
pp. 167-192
Author(s):  
Brian Muyambiri ◽  
Nicholas M. Odhiambo
Keyword(s):  
Full Article ◽  
Empirical Research ◽  
Financial Development ◽  
Empirical Literature ◽  
International Literature ◽  
Macroeconomic Variables ◽  
Development Indicators ◽  
Investment Determinants ◽  
The Impact ◽  
The Relationship

[full article and abstract in English] This article summarises the empirical literature on the impact of financial development on investment. It presents a topical analysis of empirical research that focuses mainly on the interaction between financial development and investment, determinants and measurement of both financial development and investment, and empirical findings on the relationship between the two variables under discussion. The study concludes that most of the research done on the relationship between financial development and investment is highly skewed towards assessing the relationship using mostly bank-based financial development indicators, as compared to the market-based financial development indicators. Given the number of studies assessed, the impact of financial development on investment appears to be inconclusive, at best. Moreover, the study shows that the relationship between these two macroeconomic variables seems to differ from country to country; it is dependent on the proxies used to measure the level of financial development, as well as the methodology employed.

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