Testing market structure assumptions for DSGE modelling in Croatia using the SVAR model with long-run restrictions

This study develops a monetary Schumpeterian model with endogenous market structure (EMS) to explore the effects of monetary policy on the number of firms, firm size, economic growth, and social welfare. EMS leads to different results from previous studies in which market structure is exogenous. In the short run, a higher nominal interest rate reduces the growth rates of innovation, output, and consumption and decreases firm size through reduction in labor supply. In the long run, a higher nominal interest rate reduces the equilibrium number of firms but has no steady-state effect on economic growth and firm size because of EMS. Although monetary policy has no long-run growth effect, increasing the nominal interest rate permanently reduces the levels of output, consumption, and employment. Taking transition dynamics into account, we find that welfare is decreasing in the nominal interest rate and the Friedman rule is optimal in this economy.

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HIGHER EDUCATION SUBSIDY POLICY AND R&D-BASED GROWTH

Macroeconomic Dynamics ◽

10.1017/s1365100519000142 ◽

2019 ◽

Vol 24 (8) ◽

pp. 2129-2168 ◽

Cited By ~ 2

Author(s):

Takaaki Morimoto ◽

Ken Tabata

Keyword(s):

Higher Education ◽

Economic Growth ◽

Market Structure ◽

Overlapping Generations Model ◽

Subsidy Policy ◽

Mass Higher Education ◽

Long Run ◽

Negative Effect ◽

Short Run ◽

Education Subsidy

We examine how a subsidy policy for encouraging more individuals to pursue higher education affects economic growth in an overlapping generations model of R&D-based growth, including both product development and process innovation. We show that such a policy may have a negative effect on the long-run economic growth rate. When the market structure adjusts partially in the short run, the effect of an education subsidy on economic growth is ambiguous and depends on the values of the parameters. However, when the market structure adjusts fully in the long run, the education subsidy expands the number of firms but reduces economic growth. These unfavorable predictions of an education subsidy on economic growth are partly consistent with the empirical findings that mass higher education does not necessarily lead to higher economic growth.

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Market Structure and Spatial Price Dynamics

Journal of Agricultural and Applied Economics ◽

10.1017/s0081305200018185 ◽

1991 ◽

Vol 23 (2) ◽

pp. 65-74 ◽

Cited By ~ 2

Author(s):

B. Wade Brorsen ◽

Jean-Paul Chavas ◽

Warren R. Grant

Keyword(s):

Time Series ◽

Market Structure ◽

Market Share ◽

Price Dynamics ◽

Milled Rice ◽

Price Adjustments ◽

Long Run ◽

Number Of Factors ◽

Price Leader ◽

Spatial Price

AbstractA method was developed with time series models to test hypotheses about the relationship between market structure and spatial price dynamics. Long-run dynamic multipliers measuring the magnitude of lagged adjustment for spatial milled rice prices were calculated from the time series model and used as the dependent variable in a regression model that included a number of factors expected to influence price determination. Results show that price adjustments were slower as regional submarket concentration increased and were faster in the regions with a higher market share. Arkansas, the state with the largest market share, was consistently a price leader.

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The Degree of Competition in the UAE Banking Industry

International Finance and Banking ◽

10.5296/ifb.v4i2.11593 ◽

2017 ◽

Vol 4 (2) ◽

pp. 1

Author(s):

George Owusu Antwi ◽

Rachna Banerjee ◽

Amal Abeer Mohammed ◽

Mariam Juma Muna-Habib

Keyword(s):

Market Structure ◽

Banking Sector ◽

Monopolistic Competition ◽

Banking Industry ◽

Balance Sheet ◽

Competitive Environment ◽

Input Price ◽

Financial Products ◽

Long Run ◽

Banking Market

This paper has made an attempt to assess the degree of competition (or market structure) in the UAE banking sector using the H-statistics established by Panzar-Rosse (1987). Data of six years (2009-2015) have been extracted from various balance sheet and income statements of the banks. Pooled OSL estimator was used to obtain the coefficient. The inputs prices were found to be significant except the input price of labor. Total asset was registered to be positively significant. All other variables were not significant. The results of the study reveal that the UAE banking market structure is characterized by the monopolistic competition. That is, banks earned their revenue as if operating under conditions of monopolistic competition during this period. A robust check was performed to test for validity of PR-model. The results yield E-statistic which is consistent with long-run equilibrium. It is believed that both the small and the larger banks operate relatively equal more in a competitive environment. We recommend that UAE should develop new financial products and services that will provide convenience to customers while improving profitability.

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Inflation, market structure, and innovation-driven growth with distinct cash constraints

Oxford Economic Papers ◽

10.1093/oep/gpaa042 ◽

2020 ◽

Author(s):

By Chien-Yu Huang ◽

Juin-Jen Chang ◽

Lei Ji

Keyword(s):

Growth Rate ◽

Monetary Policy ◽

Numerical Analysis ◽

Market Structure ◽

Schumpeterian Growth ◽

Long Run ◽

Short Run ◽

Endogenous Market Structure ◽

The Relationship ◽

D Investment

Abstract This article explores the effects of monetary policy (inflation) in a Schumpeterian growth model with an endogenous market structure and distinct cash (or cash-in-advance, CIA) constraints on consumption, production, and two types of R&D investment—quality-improving and variety-expanding R&D. We show that the relationship between inflation and growth is negative if quality-improving R&D (incumbent) is subject to the CIA constraint, but positive if variety-expanding R&D (entrant) is subject to the CIA constraint. Inflation has no effect on growth as consumption or production is subject to the CIA constraint. In addition, the firm size may either increase or decrease in response to inflation depending on which type of R&D is constrained by cash. With all CIA constraints properly imposed, a likely scenario in our numerical analysis shows that a rise in inflation leads the growth rate to exhibit a decrease in the short run but an increase in the long run. Moreover, our welfare analysis shows that Friedman’s rule, in general, is not socially optimal.

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Are PIIGS so different? An empirical analysis of demand and supply shocks

Panoeconomicus ◽

10.2298/pan1702189s ◽

2017 ◽

Vol 64 (2) ◽

pp. 189-222 ◽

Cited By ~ 1

Author(s):

Irina Syssoyeva-Masson ◽

Andrade Sousa

Keyword(s):

Supply And Demand ◽

Parametric Representation ◽

Structural Vector Autoregression ◽

Demand And Supply ◽

Demand Shocks ◽

Supply Shocks ◽

Supply And Demand Shocks ◽

Long Run ◽

Svar Model ◽

The Usa

This paper analyses responses to supply and demand shocks in PIIGS countries. We compare the results obtained for PIIGS with those of Germany and the USA, and also with those of France, which despite its government?s efforts demonstrate relatively poor recent economic performance. The main objective of this paper is to establish whether it is still reasonable to consider PIIGS as a group apart. Our methodological strategy is based on the Okun Law (OL) which is incorporated in a Structural Vector Autoregression (SVAR) model with Blanchard-Quah (BQ) restrictions. We address two drawbacks that usually present in the OL: the interdependency problem and the non-stationarity problem. By using a non-parametric representation of OL, we identify the heterogeneity between countries. We build stable VAR models for each of the economies and use the BQ SVAR impulses to analyse the importance of contemporary and long-run effects of supply and demand shocks. The main conclusion of this paper is that it does not make any sense today to identify PIIGS as a separate group. Additionally, a country that stands out from our analysis is France. The question can thus be posed that if ?PIIGS? signifies ?countries with poor economic performances? then should not France also belong to this group?

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Does Emigration Hurt the Economy? Evidence from Lithuania

Organizations and Markets in Emerging Economies ◽

10.15388/omee.2021.12.64 ◽

2021 ◽

Vol 12 (2) ◽

pp. 440-458

Author(s):

Gindrute Kasnauskiene ◽

Remigijus Kavalnis

Keyword(s):

Economic Losses ◽

Gdp Growth ◽

Short Term ◽

Real Gdp ◽

Lower Confidence ◽

Long Run ◽

Svar Model ◽

Positive Shock ◽

The Impact

This study explores the economic impact of population emigration with special reference to the case of Lithuania. For this reason, we developed a SVAR model and applied related IRF and FEVD tools using quarterly data for the period of 2001-2020. Our findings reveal that a positive shock in emigration is related to lower unemployment. It is also found that the increased emigration is linked to higher real wage growth but with a lower confidence interval. Moreover, our estimates suggest that international out-migration increases real GDP growth in the short term, with no significant effects in the long run perspective. Finally, we found that most of the emigrants-to-be were inactive for a long term prior to departure, which offers a new look into the consequences of Lithuanian emigration, suggesting that the economic losses of emigration could be overstated. This study contributes to the knowledge about the impact of emigration on the economy and specifies directions for further studies in the field.

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Structural Effect of Oil Price Shocks and Food Importation on Economic Growth in Nigeria Using SVAR Model

International Business and Accounting Research Journal ◽

10.15294/ibarj.v2i1.30 ◽

2017 ◽

Vol 2 (1) ◽

Author(s):

Sani Abdulrahman Bala ◽

Ali Alhassan

Keyword(s):

Economic Growth ◽

Exchange Rate ◽

Crude Oil ◽

Oil Price ◽

Oil Price Shocks ◽

Crude Oil Price ◽

Price Shocks ◽

Long Run ◽

Svar Model ◽

Food Imports

The study empirically examines the effect of oil price shocks and food importation on economic growth in Nigeria along with two control variables i.e. exchange rate and inflation using Structural Vector Autoregressive (SVAR) Model covering the period of 1970 to 2015. The result from SVAR short-run pattern and long-run pattern indicate that GDP has recently been affected by all variables in the model. More also, it indicates a significant permanent effect of crude oil price shocks and food imports on economic growth, while the result further indicates a transitory effect of exchange rate and inflation on economic growth. For significant t-value of the long run SVAR estimate matrix, confirms long effect of crude oil price shocks, food imports, exchange rate and inflation on economic growth in Nigeria. The results from structural response indicate that crude oil have high positive impact on GDP at the initial period and negative impact at the end of the period. Furthermore, food imports have high negative effect on GDP, while GDP response negatively to exchange rate and inflation rate from the period. The result from the structural decompositions indicates that crude oil price and food imports and exchange rate contribute more variability to GDP, while inflation contribute less variability in explaining the variation of GDP in Nigeria. The study recommends that government should come up with a policy that will focus on alternative sources of government revenue by investing more in real sectors especially agriculture in order to withstand vicissitudes of oil shocks in future.

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Market Structure and Competition of Islamic Banking in Indonesia

Buletin Ekonomi Moneter dan Perbankan ◽

10.21098/bemp.v20i3.855 ◽

2018 ◽

Vol 20 (3) ◽

pp. 307-324

Author(s):

. Sunarmo

Keyword(s):

Panel Data ◽

Market Structure ◽

Monopolistic Competition ◽

Islamic Banking ◽

Long Run ◽

Long Run Equilibrium

The aim of this study is to investigate the market structure and competition of Islamic Banking with H-statistics (Panzar and Roose) model using panel data over a period of July 2010 to September 2014. The result of H-statistics test for long-run equilibrium showed disequilibrium condition. It means that Islamic banking in developing stage. While the market structure and competition test confirmed that the value of the degree of H-statistics generally in monopolistic competition market with score 0.53 to 1.06.

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