scholarly journals Regional Income Disparities and Convergence Clubs in Indonesia: New District-Level Evidence 2000-2017

2020 ◽  
Author(s):  
Harry Aginta ◽  
Anang Budi Gunawan ◽  
Carlos Mendez
Keyword(s):  
Factor Model ◽  
District Level ◽  
Dynamic Factor ◽  
Data Set ◽  
Regional Income ◽  
Policy Makers ◽  
Income Disparities ◽  
Convergence Clubs ◽  
Development Policies ◽  
Regional Development Policies

Abstract Reducing regional income disparities is a central challenge for promoting sustainable development in Indonesia. In particular, the prospect for these disparities to be reduced in the post-decentralization period has become a major concern for policymakers. Motivated by this background, this paper aims to re-examine the regional convergence hypothesis at the district level in Indonesia over the 2000-2017 period. By using non-linear dynamic factor model, this study analyzes novel data set to investigate the formation of multiple convergence clubs. The results indicate that Indonesian districts form five convergence clubs, implying that the growth of income per capita in Indonesian 514 districts can be clustered into five common trends. From the lens of spatial distribution, two common occasions can be observed. First, districts belonging to the same province tend be in the same club and second, the highest club is dominated by districts with specific characteristic (i.e., big cities or natural resources rich regions). From a policy standpoint, this findings of multiple convergence clubs at significantly different levels of income allows regional policy makers to identify districts facing similar challenges. It may have meaningful implications for regional development policies, including the call of inter-provincial development policy.

scholarly journals Regional income disparities, monopoly and finance

2020 ◽  
Author(s):  
Maryann Feldman ◽  
Frederick Guy ◽  
Simona Iammarino
Keyword(s):  
Research Programme ◽  
Agglomeration Economies ◽  
Ongoing Research ◽  
Financial Firms ◽  
Income Disparities ◽  
Limited Success ◽  
Development Policies ◽  
Regional Development Policies ◽  
The Usa ◽  
Ongoing Research Programme

Abstract The overall rise in inequality in the USA since 1980 has been matched by a rise in inequality between places; local and regional development policies aimed at reversing this polarisation have seen limited success. We propose an explanation for the spatial polarisation of prosperity and the failure of the policies to remedy it. Our explanation is based on the interaction of monopoly power, agglomeration economies in technology clusters and the power of financial sector actors over non-financial firms—all phenomena characteristic of the post-1980 economy. We review evidence for each of these elements and propose some causal relationships between them, as an outline of an ongoing research programme.

scholarly journals CHINA'S ROLE IN GLOBAL INFLATION DYNAMICS

2016 ◽  
Vol 22 (2) ◽  
pp. 225-254 ◽  
Author(s):  
Sandra Eickmeier ◽  
Markus Kühnlenz
Keyword(s):  
Factor Model ◽  
Supply And Demand ◽  
Commodity Prices ◽  
Set Covering ◽  
Dynamic Factor ◽  
Data Set ◽  
Structural Dynamic ◽  
Inflation Dynamics ◽  
Demand Shocks ◽  
Supply And Demand Shocks

We apply a structural dynamic factor model to a large quarterly data set covering 38 countries between 2002 and 2011 to analyze China's role in global inflation dynamics. We identify Chinese supply and demand shocks and examine their contributions to global price dynamics and the transmission mechanism. Our main findings are as follows: (i) Chinese supply and demand shocks affect prices in other countries significantly. Demand shocks matter slightly more than supply shocks. Producer prices tend to be more strongly affected than consumer prices by Chinese shocks. The overall share of international inflation explained by Chinese shocks is notable (about 6 percent on the average over all countries but not more than 13 percent in each region). (ii) Direct channels (via import and export prices) and indirect channels (via greater exposure to foreign competition and commodity prices) both matter. (iii) Differences in trade and in commodity exposure help explain cross-country differences in price responses.

Regional Income Disparities, Monopoly & Finance

2019 ◽  
Author(s):  
Maryann P. Feldman ◽  
Frederick Guy ◽  
Simona Iammarino
Keyword(s):  
Regional Income ◽  
Income Disparities

Convergence or Divergence Patterns in Global Defence Spending: Further Evidence from a Nonlinear Single Factor Model

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Charles Shaaba Saba
Keyword(s):  
Low Income ◽  
Factor Model ◽  
National Income ◽  
Testing Procedure ◽  
Low Income Countries ◽  
Convergence Clubs ◽  
Defence Spending ◽  
Public Resources ◽  
World Income ◽  
International Convergence

AbstractThis study re-examines the international convergence in defence spending for 125 countries spanning 1985–2018. We employ the approach of Phillips and Sul, which tests for the existence of convergence clubs and the modelling of different transition paths to convergence. Our findings suggest no overall defence spending convergence at the world, income groups (except the low-income countries) and regional levels. However, we identify two convergence clubs using an iterative testing procedure and eventually (i) at world level, these two clubs exhibit convergence, and (ii) while taking into account Gross national income, geography and defence alliances/economic cooperation it is possible to make different number of convergence/divergence clubs. Contrary to previous findings, this study finds that the process of convergence in defence spending does not reflect the desirable emanations of defence policies sharing similar characteristics, at least in terms of the allocation of scarce public resources across the globe.

scholarly journals A Dynamic Factor and Neural Networks Analysis of the Co-movement of Public Revenues in the EMU

2021 ◽  
Author(s):  
Cosimo Magazzino ◽  
Marco Mele
Keyword(s):  
Neural Networks ◽  
Factor Model ◽  
Common Factor ◽  
Back Propagation ◽  
Dynamic Factor ◽  
Common Component ◽  
Economic Cycles ◽  
Composite Nature ◽  
Empirical Demonstration ◽  
Public Revenues

AbstractThis paper shows that the co-movement of public revenues in the European Monetary Union (EMU) is driven by an unobserved common factor. Our empirical analysis uses yearly data covering the period 1970–2014 for 12 selected EMU member countries. We have found that this common component has a significant impact on public revenues in the majority of the countries. We highlight this common pattern in a dynamic factor model (DFM). Since this factor is unobservable, it is difficult to agree on what it represents. We argue that the latent factor that emerges from the two different empirical approaches used might have a composite nature, being the result of both the more general convergence of the economic cycles of the countries in the area and the increasingly better tuned tax structure. However, the original aspect of our paper is the use of a back-propagation neural networks (BPNN)-DF model to test the results of the time-series. At the level of computer programming, the results obtained represent the first empirical demonstration of the latent factor’s presence.

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