scholarly journals Emigration and Wages in an Open Economy: Some Evidence from Pakistan

1991 ◽  
Vol 30 (3) ◽  
pp. 243-262 ◽  
Author(s):  
Zafar Mahmood
Keyword(s):  
Open Economy ◽  
Manufacturing Sector ◽  
Theoretic Model ◽  
Agriculture Sector ◽  
Traded Goods ◽  
Long Run ◽  
Fixed Prices ◽  
Unskilled Workers ◽  
The Impact ◽  
Skilled And Unskilled Workers

This paper examines the impact of labour emigration on the wages of both the skilled and unskilled workers. The paper is based on a 3 X 3 trade-theoretic model, where a subset of the goods produced are traded at internationally fIXed prices. The results of the model hinge cruci~y on the intensities of the factors used 'within' the traded goods sectors of the economy. Using the Pakistani data, it is found that unskilled labour is used extremely intensively in the agriculture sector (exportable), skilled labour is used extremely intensively in the manufacturing sector (importable), and capital is used as the middle factor in both the traded goods sectors. Moreover, capital is used significantly less intensively in the construction (non-traded) sector relative to both the traded sectors. Based on the estimated relative factor intensities, the model predicts that emigration of either skilled or unskilled workers from Pakistan, in the long run, would benefit (in nominal as well as real terms) both the skilled and unskilled workers and hurt the owners of capital. The results suggest that the higher wages to both the skilled and unskilled workers must be compensated by a reduction in the rate of returns to capital if export-orientcd and import-competing sectors in Pakistan are to remain internationally competitive.

scholarly journals Agriculture Sector Credit and Output Relationship in Nepal

2020 ◽  
pp. 33-53
Author(s):  
Arjun Kumar Dahal ◽  
Khagendra Kumar Thapa
Keyword(s):  
Commercial Banks ◽  
Agricultural Sector ◽  
Least Squares Method ◽  
Manufacturing Sector ◽  
Agriculture Sector ◽  
Industrial Sectors ◽  
Long Run ◽  
Integration Test ◽  
The Government ◽  
The Impact

Purpose: The purpose of this study is to find out the condition of priority of commercial banks to provide loans to the agricultural sector and to find the relationship and impact of agricultural loans to the agricultural GDP of Nepal. Objectives: This study aims to compare the condition of loan disbursements in agricultural and manufacturing sectors. It further aims to compare loan percent with growth and contribution to the GDP of the agricultural and industrial sectors and tries to show the impact of agricultural loans to the agricultural GDP of Nepal. Methods: It was based on a descriptive and analytical research design. Statistical tools standard deviation, correlation, regression, etc. are used and Excel, and EViews software are used for the statistical calculations. Statistical calculations and graphs are simultaneously used to show and compare the condition of variables. Results: Commercial banks give higher priority to the manufacturing sector for loans than the agricultural sector. The Johansen Co-integration test indicates no long-run relationship between loans of commercial banks and agricultural output in Nepal. However, the least-squares method, it indicates that a positive causal relationship between agricultural loans and agricultural growth. Implications: The loans of commercial banks directly stimulate the growth of agriculture but the amount of growth is less noticeable. Thus, it is concluded that the commercial bank's loan alone cannot affect and control the growth of the agricultural sector of the Nepalese economy therefore the government should increase its expenditure on the agricultural sector.

The long-run stability of a small, open economy under crawling peg regime

2002 ◽  
Vol 52 (1) ◽  
pp. 57-78
Author(s):  
S. Çiftçioğlu
Keyword(s):  
Exchange Rate ◽  
Open Economy ◽  
Risk Premium ◽  
Small Open Economy ◽  
Exchange Rate Policy ◽  
Price Stability ◽  
Output Stability ◽  
Long Run ◽  
The Exchange Rate ◽  
The Impact

The paper analyses the long-run (steady-state) output and price stability of a small, open economy which adopts a “crawling-peg” type of exchange-rate regime in the presence of various kinds of random shocks. Analytical and simulation results suggest that with the exception of money demand shocks, an exchange rate policy which involves a relatively higher rate of indexation of the exchange rate to price level is likely to lead to the worsening of price stability for all types of shocks. On the other hand, the impact of adopting such a policy on output stability depends on the type of the shock; for policy shocks to the exchange rate and shocks to output demand, output stability is worsened whereas for the shocks to risk premium of domestic assets, supply price of domestic output and the wage rate, better output stability is achieved in the long run.

Economic Growth and Foreign Workers in ASEAN and Singapore

2012 ◽  
Vol 11 (3) ◽  
pp. 114-136 ◽  
Author(s):  
Shandre Mugan Thangavelu
Keyword(s):  
Open Economy ◽  
Wage Gap ◽  
Small Open Economy ◽  
Output Growth ◽  
Foreign Workers ◽  
Domestic Economy ◽  
Unskilled Workers ◽  
Market Trends ◽  
State Growth ◽  
The Impact

This paper studies the trends of foreign immigrants in Asia and their effect on the growth of the Singapore economy. The paper also discusses the key labor market trends and the rationale for foreign workers in a small open economy like Singapore. Further, the paper highlights key simulations of the impact of foreign immigrants on output growth and wage gap for the Singapore economy by using Thangavelu's (2011) dynamic general equilibrium model. The study accounts for the flow of skilled and unskilled foreign workers on (a) steady-state growth; (b) the wage gap between the skilled and unskilled workers; and (c) innovation capabilities of the domestic economy. Further, the model also accounts for the contribution of immigrants on the welfare of the domestic economy through the immigration surplus that will accrue to the domestic economy.

scholarly journals International trade in services and inequalities

2016 ◽  
Vol 23 (5) ◽  
pp. 1069-1075 ◽  
Author(s):  
Sylvain Petit
Keyword(s):  
Wage Inequality ◽  
Developed Countries ◽  
Tourism Industry ◽  
Skilled Workers ◽  
Business Services ◽  
Long Run ◽  
Short Run ◽  
Unskilled Workers ◽  
Tourism Services ◽  
The Impact

This study investigates the impact of the international openness in tourism services trade on wage inequality between highly skilled, semi-skilled, and unskilled workers in the tourism industry. The sample covers 10 developed countries and expands over 15 years. A cointegrated panel data model and an error correction model were used to distinguish between the short- and long-run effects. The results are compared to those of openness of business services and manufactured goods. The findings point out that tourism increases wage inequality at the expense of the least skilled workers in the long run and the short run.

Risk Aversion and Unemployment in an Open Economy

2000 ◽  
Vol 49 (2) ◽  
Author(s):  
Pia Weiß
Keyword(s):  
Risk Aversion ◽  
Open Economy ◽  
Small Open Economy ◽  
Risk Behaviour ◽  
Terms Of Trade ◽  
Individual Risk ◽  
Risk Averse ◽  
Search Frictions ◽  
Long Run ◽  
The Impact

AbstractThe paper analyses the impact which risk aversion has on a small open economy characterised by search frictions on the labour market. It is shown that the long-run qualitative effects caused by a terms-of-trade shock are independent of individual risk behaviour. As far as quantitative aspects are concerned risk aversion always leads to higher equilibrium employment; however the increase in unemployment due to a price shock is the higher the more risk-averse individuals are.

Cash crops financing, agricultural performance and sustainability: evidence from Nigeria

2020 ◽  
Vol 11 (3) ◽  
pp. 481-503
Author(s):  
Abiola John Asaleye ◽  
Philip O. Alege ◽  
Adedoyin Isola Lawal ◽  
Olabisi Popoola ◽  
Adeyemi A. Ogundipe
Keyword(s):  
Palm Oil ◽  
Structural Equations ◽  
Sustainable Growth ◽  
Cash Crop ◽  
Content Type ◽  
Vector Error Correction ◽  
Agriculture Sector ◽  
Agricultural Performance ◽  
Long Run ◽  
The Impact

PurposeOne of the challenging factors in achieving sustainable growth is the inability of the Nigerian government to diversify the country's revenue base. This study aims to investigate the relationship between cash crop financing and agricultural performance in Nigeria.Design/methodologyFour crops were considered, namely, cotton, cocoa, groundnut and palm oil. The impact of cash crop finance shock on agricultural performance was investigated using the vector error correction model (VECM), while the long-run relationship was examined through the identification of long-run restrictions on the VECM.FindingsThe variance decomposition showed that financing shock is more sensitive to cause variation in aggregate employment than aggregate agricultural output in palm oil, while for cocoa, cotton and groundnut showed otherwise. The long-run structural equations exert a positive relationship between cash crop financing and agricultural performance, except for oil palm and cocoa financing that has a negative connection with agrarian employment.Research limitations/implicationsThe study is limited to the unavailability of data for agriculture sector capital utilisation, which was not used.Practical implicationsThese results show that long-run benefit can be maximised by appropriate funding in cotton and groundnut production to promote sustainable growth.Originality/valueThe study examines the impact of cash crop financing on agricultural performance with the aim to promote sustainable growth in Nigeria using identified VECM.

scholarly journals Fairness, Search Frictions, and Offshoring

2013 ◽  
Vol 13 (1) ◽  
pp. 137-172 ◽  
Author(s):  
Devashish Mitra ◽  
Priya Ranjan
Keyword(s):  
Wage Inequality ◽  
Open Economy ◽  
Closed Economy ◽  
Skilled Workers ◽  
Unemployment Rates ◽  
Unskilled Workers ◽  
Fairness Concerns ◽  
The Cost ◽  
The Impact

Abstract: Fairness considerations are introduced into the determination of wages in a two factor Pissarides-style model of search unemployment to study its implications for the unemployment rates of unskilled and skilled workers in both the closed economy case and when the economy can offshore some inputs. Both fairness concerns and offshoring of jobs done by unskilled workers create the overhiring effect for skilled workers. An increase in the concern for fairness in the closed economy increases the cost of hiring unskilled workers and increases the unemployment rates of both types of workers; however, wage inequality decreases. In the open economy case, an increase in the concern for fairness leads to greater offshoring which prevents skilled unemployment from increasing, but the unemployment of unskilled workers increases. A reduction in the cost of offshoring also increases offshoring and increases the unemployment of unskilled workers, but has a positive effect on skilled workers. Due to the presence of an overhiring effect in the hiring of skilled workers for both offshoring and non-offshoring firms, skilled workers experience higher wages and lower unemployment. The opposite movements in skilled and unskilled unemployment render the net effect ambiguous. Even though wage inequality increases, the impact on the wages of unskilled workers is ambiguous.

scholarly journals The Role of Power Generation and Industrial Consumption Uncertainty in De-industrialising Pakistan

2013 ◽  
Vol 52 (4I) ◽  
pp. 517-536
Author(s):  
Bushra Yasmin ◽  
Wajeeha Qamar
Keyword(s):  
Manufacturing Sector ◽  
Developed Countries ◽  
Industrial Sector ◽  
Economic Changes ◽  
Services Sector ◽  
Stage Of Development ◽  
Long Run ◽  
Natural Outcome ◽  
Secular Decline ◽  
The Impact

The term deindustrialisation refers to the process of socio-economic changes taking place due to reduction in the industrial capacity and/or the loss of industrial potential of an economy. This also connotes the secular decline in the share of industrial sector employment as observed in developed countries since 1970s. The secular shift from manufacturing to services sector reflects the impact of discrepancy in productivity growth between the said sectors. A faster rise in productivity in manufacturing sector than in services switches the employment from manufacturing to the services sector, as suggested by Rowthorn and Ramaswamy (1997). Generally, deindustrialisation is considered as the natural outcome of economic development because it involves the transformation from primitive agriculture-based economy to the modern industrial-based. After the establishment of manufacturing sector, the long-run economic growth stimulates an innovation-based economy implying the services sector’s growth [Galor (2005)]. However, the process requires a gradual shift accompanied by allied institutional and infrastructural reforms and the process of deindustrialisation occurs at the later stage of development.

scholarly journals The Differential Effects of Foreign Investments on Sectoral Growth

CONVERTER ◽  
2021 ◽  
pp. 674-688
Author(s):  
Cheng Hui Fang, Agbanyo George Kwame
Keyword(s):  
Economic Growth ◽  
Foreign Investment ◽  
Service Sector ◽  
Manufacturing Sector ◽  
Generalized Method Of Moments ◽  
Economic Sectors ◽  
Differential Effects ◽  
Agriculture Sector ◽  
Sectoral Growth ◽  
The Impact

Previous studies on the effect of FDI on sectoral growth are far from reaching a consensus. This paper, using a panel data of 35 countries between 1990-2019, aims at investigating the differential effects of foreign direct investment modes of entry into the economic sectors. Through the systems generalized method of moments methodology, this study found that the impact of foreign investment on growth corresponds directly with the absorptive capacity of the host country. Meanwhile,M&A is a better economic booster than greenfield investment. The results also suggest that foreign investment is a significant agent of economic growth in the service sector, relatively weak in the manufacturing sector and insignificant in the agriculture sector. Also, M&A seems to spillover more easily than greenfield across sectors, and natural resources are not very good channels to transmit foreign investment into economic growth.

scholarly journals The impact of Indonesian oil price (CPI) and macroeconomics on investments in the manufacturing sector in Indonesia

F1000Research ◽  
2021 ◽  
Vol 10 ◽  
pp. 338
Author(s):  
Handri Handri ◽  
Hendrati Dwi Mulyaningsih ◽  
Achmad Kemal Hidayat ◽  
Rudi Kurniawan ◽  
Ani Wahyu Rachmawati
Keyword(s):  
Energy Source ◽  
Stock Prices ◽  
Manufacturing Sector ◽  
Granger Causality Test ◽  
Oil Price ◽  
Causality Test ◽  
Long Run ◽  
Short Run ◽  
The Impact

Background: Indonesia consumes oil as the main energy source in the production process and as a result of the development of the manufacturing industry. Thus, investment in manufacturing stocks will be affected by oil price fluctuations and macroeconomic conditions. Changes in oil prices will affect the performance of the manufacturing sector which in turn affects manufacturing stock prices. This paper aims to examine the impact of Indonesia's oil price shocks and macroeconomic factors on stock price movements in the manufacturing sector. Methods: This study uses monthly data for the 2009-2016 period in the manufacturing sector, and 67 stocks were selected on the basis consistently available in the period of the research. The cointegration and causality technique was used in this paper; firstly we applied a unit-panel root test, Secondly, we performed a residual test to indicate whether there was cointegration among variables in the long run equilibrium, and short the short run, we used a Granger causality test. Results: The panel unit root test (both Shin and Fisher) and the Pedroni cointegration residual test show that the data is stationary at 1%  level of significance, thus all variables simultaneously achieve long-run equilibrium, and in the short run, the Granger causality test shows that there is one way direction causality Conclusions: For long-term investment in manufacturing stocks, investors must consider the exchange rate, as it is also as a determining factor in influencing the movement of manufacturing stock prices, inflation, and the production index. Meanwhile, weakening of the rupiah in the short run will also determine investment conditions due to the dependency on raw materials for production from foreign sources. The price of oil as an energy source in the manufacturing sector does not have a long-term relationship with other variables.

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