scholarly journals Structural consequences of cyclical change for marginal group employment

2021 ◽  
Author(s):  
Michael Tåhlin ◽  
Johan Westerman
Keyword(s):  
Negative Impact ◽  
Male Youth ◽  
Marginal Groups ◽  
Cyclical Change ◽  
Long Run ◽  
Asymmetrical Pattern ◽  
Marginal Employment ◽  
Basic Hypothesis ◽  
General Demand ◽  
Employment Decline

In Sweden and many other countries, young people and immigrants are facing increasing difficulties in finding employment. We suggest that the decline in employment prospects for marginal groups to a significant extent can be explained by skill upgrading and over-education. In two recent papers focusing on youth and immigrants, respectively, we find support for these hypotheses. The present paper examines how the long-term evolution of youth male employment is linked to cyclical economic change, and in particular to recessions. We base our empirical analyses on data from 31 OECD countries, 1970 to 2018. A basic hypothesis we aim to test is whether the distribution of cyclical points around the line of long-run evolution of general employment has a vertically asymmetrical pattern with respect to marginal employment, such that the relative employment rate of marginal groups declines more in economic downturns (recessions) than it rises in economic upturns. If this asymmetry occurs systematically (repeatedly) over extended periods of time, cyclical change will have structural effects. We find support for this hypothesis based on our analysis of youth male employment. We suggest that two kinds of mechanism are at work in the interaction between cyclical and structural change. The first mechanism is operating from the structure to the cycle: low-skill jobs become increasingly unviable economically, but only slowly and gradually until a marked loss in general demand triggers significant employment decline tilted toward low-skill jobs. Restructuring of work organizations in the wake of the recession makes the return of low-skill jobs in the recovery less than complete. The second kind of mechanism operates in the other direction, i.e., from the cycle to the structure: the rate of educational expansion typically accelerates in recessions. This will in turn speed up the rate of over-education which tends to have a negative impact on marginal employment. We provide descriptive empirical evidence indicating that both these mechanisms are indeed active. In sum, recessions accelerate upward shifts in the skill structure that in turn depress the labor market prospects of male youth, with both links in the chain being of a lasting rather than temporary kind.

scholarly journals Regional trade and food security challenges: The case of SAARC countries

2020 ◽  
Vol 66 (No. 7) ◽  
pp. 335-344
Author(s):  
Muhammad Waqas Khalid ◽  
Ashar Sultan Kayani ◽  
Jamal Mohammed Alotaibi ◽  
Muhammad Muddassir ◽  
Bader Alhafi Alotaibi ◽  
...  
Keyword(s):  
Food Security ◽  
Regional Cooperation ◽  
Negative Impact ◽  
Positive Impact ◽  
Regional Trade ◽  
Policy Makers ◽  
Long Run ◽  
Security Challenges ◽  
Trading Partners ◽  
Trade Partners

Higher consumption and increased import requirements for the South Asian Association for Regional Cooperation (SAARC) region can be catered through neighboring trade partners if resources are optimally utilized. The purpose of this research is to analyze the connection between regional trade of SAARC countries and the food security challenges faced by the region. The study uses data from 1990–2018 for Pakistan, India, Sri Lanka, and Bangladesh to econometrically analyze the determinants of the volume of food trade. The results show that the gross domestic product of importing or exporting countries and foreign direct investment (FDI) have positive impact on regional trade. The bilateral exchange rate between trading partners has a negative impact on the trade volume. The results also showed the absence of a long-run relationship between volume of trade and food security using Johansen’s cointegration test. Our analysis suggests that policy makers should focus on the means for creating favorable environment in Pakistan and India to not only meet the increasing global demands for food but also increasing their competitiveness for high-quality and low-quality priced products in major exports markets.

scholarly journals The Debt Overhang Hypothesis: Evidence from Pakistan

2016 ◽  
Vol 11 (1) ◽  
pp. 140-151 ◽  
Author(s):  
Muhammad Imran Shah ◽  
Irfan Ullah ◽  
Zia Ur Rahman ◽  
Nadeem Jan
Keyword(s):  
Economic Growth ◽  
Dynamic Behaviour ◽  
Negative Impact ◽  
Labour Force ◽  
External Debt ◽  
Unit Roots ◽  
Debt Overhang ◽  
Debt Burden ◽  
Long Run ◽  
Domestic Labour

AbstractThis study investigates the debt overhang hypothesis for Pakistan in the period 1960-2007. The study examines empirically the dynamic behaviour of GDP, debt services, the employed labour force and investment using the time series concepts of unit roots, cointegration, error correlation and causality. Our findings suggest that debt-servicing has a negative impact on the productivity of both labour and capital, and that in turn has adversely affected economic growth. By severely constraining the ability of the country to service debt, this lends support to the debt-overhang hypothesis in Pakistan. The long run relation between debt services and economic growth implies that future increases in output will drain away in form of high debt service payments to lender country as external debt acts like a tax on output. More specifically, foreign creditors will benefit more from the rise in productivity than will domestic producers and labour. This suggests that domestic labour and capital are the ultimate losers from this heavy debt burden.

Relationship between Budget Deficit and Economic Growth: Evidence from Ethiopia

2021 ◽  
Vol 2 (2) ◽  
pp. 10-15
Author(s):  
Desalegn Emana
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Budget Deficit ◽  
Time Series Data ◽  
Negative Impact ◽  
Positive Impact ◽  
Negative Relationship ◽  
Nominal Exchange Rate ◽  
Series Data ◽  
Long Run

This study examined the relationship between budget deficit and economic growth in Ethiopia using time series data for the period 1991 to 2019 by applying the ARDL bounds testing approach. The empirical results indicate that budget deficit and economic growth in Ethiopia have a negative relationship in the long run, and have a weak positive association in the short run. In line with this, in the long run, a one percent increase in the budget deficit causes a 1.43 percent decline in the economic growth of the country. This result is consistent with the neoclassical view which says budget deficits are bad for economic growth during stimulating periods. Moreover, in the long run, the variables trade openness and inflation have a positive impact on Ethiopian economic growth, and on the other hand, the economic growth of Ethiopia is negatively affected by the nominal exchange rate in the long run. Apart from this, in the long run, gross capital formation and lending interest rates have no significant impact on the economic growth of the country. Therefore, the study recommends the government should manage its expenditure and mobilize the resources to generate more revenue to address the negative impact of the budget deficit on economic growth.

scholarly journals Farmers’ Perception on Climate Change: A Study in Tarai Region of Uttarakhand

2021 ◽  
pp. 581-591
Author(s):  
. Neha ◽  
Mohammad Aslam Ansari
Keyword(s):  
Climate Change ◽  
Negative Impact ◽  
Winter Season ◽  
Simple Random Sampling ◽  
Policy Formulation ◽  
Mitigation Measures ◽  
Peak Time ◽  
Adaptation Measures ◽  
Agriculture Sector ◽  
Long Run

Climate change has emerged as a potent threat disrupting the development process and is hurting several sectors of Indian economy, especially the agriculture sector. Knowledge about these disruptive factors can enable the farmers to mitigate the negative impact of climate change on agriculture. Therefore, the understanding of location-specific farmers’ perceptions and their adaptive behaviors can provide a better insight to design appropriate policy measures and guidelines to address these challenges effectively. The present study was aimed at determining farmers’ perceptions about climate change on agriculture. The study sample comprised 180 farmers selected using simple random sampling. The findings indicate that all the farmers (100%) were aware of climate change. All of them reported “increase in temperature” and “erratic rainfall” and “shortening of winter season” as the major indicators of climate change as experienced by them. Besides, 85.55 percent famers reported that “peak time of winter” has changed in Uttarakhand, a hilly state. Such perceptions about climate change can be seen as a precursor mediating the adoption of recommended practices and adaptation measures. Thus, the results of the study will enlighten the policy makers and agriculture scientists in preparing a roadmap for policy formulation regarding adaptation measures (short run initiatives) as well as undertaking mitigation measures (long run initiatives) of climate change besides helping the agriculture extension agencies to design and plan locale-specific adaptation strategies and agriculture development programs.

scholarly journals The Green Innovation Effect on Heavy-Polluting Enterprises Under the Environmental Protection Law

2021 ◽  
Vol 9 ◽  
Author(s):  
Leqian Ouyang ◽  
Daming You
Keyword(s):  
Environmental Protection ◽  
Local Governments ◽  
Fiscal Decentralization ◽  
Negative Impact ◽  
National Level ◽  
Green Innovation ◽  
Eastern Area ◽  
Long Run ◽  
The Difference ◽  
Financial Power

One of the main purposes of the 2015 Environmental Protection Law (EPL) of the People's Republic of China is to boost the green innovation of the enterprises. Using heavy-polluting enterprises as examples, this paper uses the Difference-in-difference analysis (DDD) technique to analyze the influence of EPL on the green innovation of enterprises under fiscal decentralization and enterprise heterogeneity. Results show that EPL exerts a negative impact on the green innovation of heavy-polluting enterprises at the national level, as well as those in the central and western areas specifically. The only presence of positive motivation for green innovation is being found in the eastern area, although, the motivation seems to be insignificant. The negative impacts have been lasting in the long run, especially for the low-performance enterprises in the central areas. As for the targeted implementation of EPL in China, local governments should make the best use of financial power under fiscal decentralization. This balanced approach is designed to motivate enterprises in different regions with various performance levels to develop green innovation based on their different weaknesses and strengths.

scholarly journals A Long Run ARDL Investigation of Manufacturing Adjustment to the Services Economy in Nigeria

2021 ◽  
Vol 9 (3) ◽  
pp. 95-107
Author(s):  
Olumuyiwa Olamade
Keyword(s):  
Capital Accumulation ◽  
Negative Impact ◽  
Manufacturing Sector ◽  
Value Added ◽  
Business Services ◽  
Development Indicators ◽  
Services Sector ◽  
Positive Effects ◽  
Distributed Lag ◽  
Long Run

The long-run equilibrating relationship between the value-added growth of services and manufacturing is investigated in this research. The study is based on the well-established empirical link between manufacturing and service activities, and in particular, manufacturing's servicification. The selected variables' annualized time series were obtained from the World Development Indicators. The paper used the autoregressive distributed lag framework to regress manufacturing value-added growth against service value-added growth while accounting for economic growth, factor input growth, and trade effects. The findings revealed that in Nigeria, a strong performing services sector has a large negative impact on manufacturing performance, whereas capital accumulation and income growth have positive effects. The supply constraint of business services that the manufacturing sector requires is at the root of this finding. The paper advocates for policy frameworks that support the efficient supply of business services as both a manufacturing input and a productivity enhancer for the entire economy.

scholarly journals Foreign Direct Investment, External Debt, and Balance of Payment: A Causality Analysis for Bangladesh

2020 ◽  
Author(s):  
Muhammad Mahmud Mostafa
Keyword(s):  
Foreign Direct Investment ◽  
Granger Causality ◽  
Direct Investment ◽  
Negative Impact ◽  
External Debt ◽  
Causality Analysis ◽  
Causality Test ◽  
Long Run ◽  
Significant Negative Impact ◽  
Short Run

The purpose of this study is to analyze the causal relationship of external debt and balance of payment with foreign direct investment (FDI) in Bangladesh for the period of 1980 to 2017 through the application of Johansen Cointegration technique, Vector Error Correction Model (VECM), and Granger Causality approach. Results of cointegration and VECM indicate a significant long-run relationship between dependent (FDI) and independent variables (external debt and balance of payment). External debt is found to have a significant negative impact on FDI in the long-run, but it is found insignificant in the short-run. In contrast, the balance of payment has a significant positive effect on FDI both in the long-run and short-run. Results of the Granger causality test reveal that there exists bidirectional short-run causality between the balance of payment and FDI; that is, both the balance of payment and FDI affect each other. But no unidirectional or bidirectional short-run causality is found between external debt and FDI. Keywords: FDI, external debt, balance of payment, cointegration, VECM, causality

scholarly journals Dampak Kenaikan Tarif Dasar Listrik Terhadap Kinerja Sektor Pertanian di Indonesia dalam Jangka Pendek dan Panjang

2018 ◽  
Vol 22 (1) ◽  
pp. 36
Author(s):  
Sahara Sahara
Keyword(s):  
Computable General Equilibrium ◽  
Negative Impact ◽  
Household Consumption ◽  
Electricity Price ◽  
Agricultural Product ◽  
Long Run ◽  
Industry Output ◽  
Short Run ◽  
Negative Impacts ◽  
Industry Sectors

Increasing on electricity price by Indonesian Government in 2001 by 17.47% and 2002 by 24% not only has negative impact on industry sectors but also on agricultural sectors. This paper aims to analysis impact on agricultural sectors performance with using a Recursive Dynamic Computable General Equilibrium (CGE) Model, namely “INDOF model”. The simulation indicates both in the short run and long run increasing on electricity price will reduce industry output, household consumption and employment in agricultural sectors. Besides that the policy will increase price of agricultural product. The negative impacts except household consumption are higher in the long run than that in the short run.

scholarly journals The Trade-Off Between Economic Performance and Environmental Quality: Does Financial Inclusion Asymmetrically Matter for Emerging Asian Economies?

2021 ◽  
Author(s):  
Dong Liu ◽  
Yuantao Xie ◽  
Muhammad Hafeez ◽  
Ahmed Usman
Keyword(s):  
Economic Growth ◽  
Carbon Emissions ◽  
Economic Performance ◽  
Negative Impact ◽  
Positive Impact ◽  
Insurance Premium ◽  
Financial Inclusion ◽  
Bank Credit ◽  
Bank Branches ◽  
Long Run

Abstract This study examines the role of financial inclusion on the environment-economic performance in the top five Asian emerging economies. The data used for empirical investigation covers the time period from 1995 to 2019. Financial inclusion is measured through bank branches, bank credit, and insurance premiums. To check long-run associations, the panel-ARDL approach has been employed for empirical analysis. The empirical evidence confirms the significant associations between financial inclusion-GDP nexus and financial inclusion-CO2 nexus. The findings show that bank branches and bank credit have a significantly positive impact on economic growth and CO2 emissions in the long-run. However, insurance premium has no impact on economic growth but it exerts a significant negative impact on carbon emissions in the long-run. Furthermore, energy consumption is highly sensitive to economic growth and carbon emissions. The study delivers imperative points for pollution eradication and attaining sustained economic growth. There is a need for government-level efforts to align the targets of financial inclusion with economic growth and environmental policies.

COVID-19 pandemic and connectedness across financial markets

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Abubakr Naeem ◽  
Saba Sehrish ◽  
Mabel D. Costa
Keyword(s):  
Financial Markets ◽  
Financial Risk ◽  
Negative Impact ◽  
Spillover Effect ◽  
External Shocks ◽  
Content Type ◽  
Time Frequency ◽  
Long Run ◽  
Short Run ◽  
Momentum Trading

Purpose This study aims to estimate the time–frequency connectedness among global financial markets. It draws a comparison between the full sample and the sample during the COVID-19 pandemic. Design/methodology/approach The study uses the connectedness framework of Diebold and Yilmaz (2012) and Barunik and Krehlik (2018), both of which consider time and frequency connectedness and show that spillover is specific to not only the time domain but also the frequency (short- and long-run) domain. The analysis also includes pairwise connectedness by making use of network analysis. Daily data on the MSCI World Index, Barclays Bloomberg Global Treasury Index, Oil future, Gold future, Dow Jones World Islamic Index and Bitcoin have been used over the period from May 01, 2013 to July 31, 2020. Findings This study finds that cryptocurrency, bond and gold are hedges against both conventional stocks and Islamic stocks on average; however, these are not “safe havens” during an economic crisis, i.e. COVID-19. External shocks, such as COVID-19, strengthen the return connectedness among all six financial markets. Research limitations/implications For investors, the study provides important insights that during external shocks such as COVID-19, there is a spillover effect, and investors are unable to hedge risk between conventional stocks and Islamic stocks. These so-called safe haven investment alternatives suffer from the similar negative impact of systemic financial risk. However, during an external shock such as COVID-19, cryptocurrencies, bonds and gold can be used to hedge risk against conventional stocks, Islamic stocks and oil. Moreover, the findings imply that by engaging in momentum trading, active investors can gain short-run benefits before the market processes any new information. Originality/value The study contributes to the emergent literature investigating the connectedness among financial markets during the COVID-19 pandemic. It provides evidence that the return connectedness among six global financial markets, namely, conventional stocks, Islamic stocks, bond, oil, gold and cryptocurrency, is extremely strong. From a methodological standpoint, this study finds that COVID-19 pandemic shock has a significant short-run impact on the connectedness among financial markets.

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