scholarly journals Effect of Import Tariff on U.S. Welfare

2019 ◽  
Author(s):  
Deergha Raj Adhikari Ph.D.
Keyword(s):  
Import Price ◽  
The United States ◽  
Sufficient Condition ◽  
Import Tariff ◽  
Significance Level ◽  
Welfare Impact ◽  
Long Run ◽  
Correction Technique ◽  
Before And After ◽  
Short Run

Last year, the Trump administration imposed import tariffs of 10 and 25 percent on the import of steel and aluminium respectively. The administration also imposed an additional tariff on more than $200 billion worth of imports from China. In this study, we examine the welfare impact of such tariffs on the U.S. welfare in general. We apply Ju and Krishna’s (2003) sufficient condition for trade reform to be welfare enhancing and test the condition using an import function. The sufficient condition for a trade policy (i.e. the import tariff) to be welfare improving as laid out by them requires that the value of import be higher than that before tariffs when the value of import before and after both are evaluated at post-tariff prices. Based on this condition, we develop an import function, in which the value of U.S. import (IMt) is a function of import price index (IPIt) and U.S. real GDP (URGDPt). If the coefficient associated with IPI turns out to be positive and significant, then we conclude that the rise in import price including that due to the import tariff, will increase the value of import satisfying the sufficient condition for welfare improvement, which leads us to conclude that the import tariff has improved U.S. welfare. We estimated our model using Vector Error Correction technique. In the long run equation, the coefficient associated with the variable 〖IPI〗_(t-1) is found to be negative and significant at 5% significance level, implying that an increase in import price caused by a tariff will lower the value of import in the long run. In the short-run equation, on the other hand, the coefficients associated with the variables 〖ΔIPI〗_(t-1) and 〖ΔIPI〗_(t-2) both turned out to be positive but insignificant, which implies that any tariff-raised increase in import price will have no effect on the value of import in the short run failing to satisfy the sufficient condition. Therefore, we conclude that the import tariff currently imposed by the United States may not improve U.S. welfare and may rather worsen it in the long run.

The Impact of Monetary and Fiscal Policies on the Stock Market in the United States (U.S); Evidence from Linear ARDL Framework

2020 ◽  
Vol 11 (1) ◽  
pp. 132-132
Author(s):  
Aref Emamian
Keyword(s):  
United States ◽  
Stock Market ◽  
The United States ◽  
Real Effective Exchange Rate ◽  
Annual Data ◽  
Fiscal Policies ◽  
Long Run ◽  
The Us ◽  
Short Run ◽  
The Impact

This study examines the impact of monetary and fiscal policies on the stock market in the United States (US), were used. By employing the method of Autoregressive Distributed Lags (ARDL) developed by Pesaran et al. (2001). Annual data from the Federal Reserve, World Bank, and International Monetary Fund, from 1986 to 2017 pertaining to the American economy, the results show that both policies play a significant role in the stock market. We find a significant positive effect of real Gross Domestic Product and the interest rate on the US stock market in the long run and significant negative relationship effect of Consumer Price Index (CPI) and broad money on the US stock market both in the short run and long run. On the other hand, this study only could support the significant positive impact of tax revenue and significant negative impact of real effective exchange rate on the US stock market in the short run while in the long run are insignificant. Keywords: ARDL, monetary policy, fiscal policy, stock market, United States

scholarly journals Implications of Governance, Natural Resources, and Security Threats on Economic Development: Evidence from Sub-Saharan Africa

2021 ◽  
Vol 18 (12) ◽  
pp. 6236
Author(s):  
Husam Rjoub ◽  
Chuka Uzoma Ifediora ◽  
Jamiu Adetola Odugbesan ◽  
Benneth Chiemelie Iloka ◽  
João Xavier Rita ◽  
...  
Keyword(s):  
Economic Development ◽  
Natural Resources ◽  
Causal Effect ◽  
Sub Saharan Africa ◽  
Security Threats ◽  
African Countries ◽  
Significance Level ◽  
Long Run ◽  
Short Run ◽  
Sub Saharan

Sub-Saharan African countries are known to be bedeviled with some challenges hindering the economic development. Meanwhile, some of these issues have not been exhaustively investigated in the context of the region. Thus, this study aimed at investigating the implications of government effectiveness, availability of natural resources, and security threats on the regions’ economic development. Yearly data, spanning from 2007 to 2020, was converted from low frequency (yearly) to high frequency (quarterly) and utilized. Data analysis was conducted using Dynamic heterogeneous panel level estimators (PMG and CS-ARDL). Findings show that while PMG estimator confirms a long-run causal effect of governance, natural resources, and security threats on economic development, only natural resources show a short-run causal effect with economic development, while the CS-ARDL (model 2) confirms the significance of all the variables both in the long and short-run. Moreover, the ECT coefficients for both models were found to be statistically significant at less than 1% significance level, which indicates that the systems return back to equilibrium in case of a shock that causes disequilibrium, and in addition, reveals a stable long-run cointegration among the variables in the model. Finally, this study suggests that the policy makers in SSA countries should place more emphasis on improving governance, managing security challenges, and effectively utilizing rents from the natural resources, as all these have severe implications for the economic development of the region if not addressed.

scholarly journals Impact of Public Debt, Deficit and Debt Financing on Private Investment in a Large Country: Evidence from the United States

2020 ◽  
Vol 6 (2) ◽  
pp. 139-161
Author(s):  
Amir Kia
Keyword(s):  
Public Debt ◽  
Public Investment ◽  
Government Expenditure ◽  
Private Investment ◽  
Adjustment Costs ◽  
The United States ◽  
Direct Impact ◽  
Large Country ◽  
Long Run ◽  
Short Run

This paper analyses the direct impact of fiscal variables on private investment. The current literature ignores one or more fiscal variables and, in many cases, the foreign financing of debt. In this paper, an aggregate investment function for an economy in which firms incur adjustment costs in their investment process is developed. The developed model incorporates the direct impact of government expenditure, public debt and investment, deficits and foreign-financed debt on private investment. The model is tested on US data. It is found that public investment does not have any impact on private investment, but government expenditure, deficit, debt and foreign-financed debt crowd out private investment over the long run. However, deficit crowds in the private investment over the short run.

Consumption, aggregate wealth and expected stock returns: a quantile cointegration approach

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Ricardo Quineche
Keyword(s):  
Stock Returns ◽  
The United States ◽  
Labor Income ◽  
Left Tail ◽  
Long Run ◽  
Short Run ◽  
Excess Stock Returns ◽  
Aggregate Wealth ◽  
Risk Free Rate ◽  
The Right

Abstract This paper empirically examines the long-run relationship between consumption, asset wealth and labor income (i.e., cay) in the United States through the lens of a quantile cointegration approach. The advantage of using this approach is that it allows for a nonlinear relationship between these variables depending on the level of consumption. We estimate the coefficients using a Phillips–Hansen type fully modified quantile estimator to correct for the presence of endogeneity in the cointegrating relationship. To test for the null of cointegration at each quantile, we apply a quantile CUSUM test. Results show that: (i) consumption is more sensitive to changes in labor income than to changes in asset wealth for the entire distribution of consumption, (ii) the elasticity of consumption with respect to labor income (asset wealth) is larger at the right (left) tail of the consumption distribution than at the left (right) tail, (iii) the series are cointegrated around the median, but not in the tails of the distribution of consumption, (iv) using the estimated cay obtained for the right (left) tail of the distribution of consumption improves the long-run (short-run) forecast ability on real excess stock returns over a risk-free rate.

scholarly journals Local Economic Impacts of Coal Mining in the United States 1870 to 1970

2016 ◽  
Vol 76 (4) ◽  
pp. 1152-1181 ◽  
Author(s):  
Mike Matheis
Keyword(s):  
Coal Mining ◽  
Resource Curse ◽  
The United States ◽  
County Level ◽  
Long Run ◽  
Local Areas ◽  
Manufacturing Activity ◽  
Short Run ◽  
Current Resource ◽  
Net Benefits

This article expands upon the current “resource curse” literature by using newly collected county data, spanning over a century, to capture the short- and long-run effects of coal mining activity. It provides evidence that increased levels of coal production had positive net impacts on county-level population and manufacturing activity over an initial ten-year span, which become negative over the subsequent decades. The results provide evidence that any existence of a “resource curse” on local areas due to coal mining is a long-run phenomenon, and in the short run there are potential net benefits.

Finance and Capital in the United States, 1850–1900

1967 ◽  
Vol 27 (4) ◽  
pp. 621-624 ◽  
Author(s):  
Richard Sylla
Keyword(s):  
Nineteenth Century ◽  
Financial Markets ◽  
Gilded Age ◽  
Banking System ◽  
The United States ◽  
Antebellum Era ◽  
Long Run ◽  
Short Run ◽  
Rapid Industrialization

The connections between financial development and economic growth are drawing increased attention on many fronts. This dissertation studies ways in which the American financial system functioned to aid in the accumulation and mobilization of capital in the second half of the nineteenth century. The evolution of the banking system, by far the dominant nineteenth-century financial intermediary, is emphasized, but the role of Federal government finance is of scarcely less importance. The interrelated actions of the banks and the Treasury did much to set the tone in various financial markets during most of the period. While considerable study has been devoted to these actions and their short-run effects, much less has been written about their long-run implications. A major contention of the work is that financial strains caused by the Civil War and the various responses to these strains were accompanied by significant changes in the banking system—in its structure, the types of assets in which it dealt, and in its relations with the Treasury—all of which increased its potential for satisfying the demands placed upon it by a rapidly expanding economy. These changes helped to make capital, which may well have been the relatively scarce factor in the antebellum era, more abundant in the postwar Gilded Age, and they therefore abetted the rapid industrialization of those decades.

scholarly journals Transmission Mechanism of Exchange Rate Pass-Through to Domestic Price: The Case of Afghanistan

2020 ◽  
Vol 16 (4) ◽  
pp. 1
Author(s):  
Ajmal Arian ◽  
Arabi U.
Keyword(s):  
Exchange Rate ◽  
Impulse Response Function ◽  
Import Price ◽  
Variance Decomposition ◽  
Long Run ◽  
Effective Exchange ◽  
Short Run ◽  
Pass Through ◽  
Exchange Rate Pass Through ◽  
Effective Exchange Rate

This article investigates the mechanism of exchange rate pass-through to the prices in the context of the Islamic Republic of Afghanistan’s economy. This study explored the magnitude and speed of the pass-through effect on the prices by analyzing quarterly data from 2003 Q1 to 2019 Q2 considering five variables (viz., world food price index, foreign reserves, money supply, import price, and nominal effective exchange rate) based on the Vector Autoregression Model (VAR) with the cointegration and innovation accounting tools such has impulse response function and variance decomposition. The findings of the study suggest that the exchange rate pass-through in Afghanistan is incomplete. The import price is highly responsive in the short-run and moderately responsive an increasingly smooth movement in the long-run. However, CPI in the short-run with swift positive respond but the long-run smooth increasing movement. Furthermore, variance decomposition evidence shows that import price is affected by FR, NEER, CPI, and MS in both short-run and long-run, but the CPI strongly lagged by its variance, WFP, NEER, import price, and MS.

scholarly journals Deconstructing the Impact of Entrepreneurship on Income Inequality in Sub-Saharan Africa Countries

2020 ◽  
Vol 34 (1) ◽  
pp. 273-284
Author(s):  
Jimoh S. Ogede
Keyword(s):  
Income Inequality ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Macroeconomic Factors ◽  
Significance Level ◽  
Long Run ◽  
Short Run ◽  
Sub Saharan ◽  
Entrepreneurial Activities ◽  
The Impact

Abstract The study examines the impacts of entrepreneurship on income inequality in a panel of 29 Sub-Saharan African countries spanning from 2004 to 2020. The paper employs a dynamic heterogeneous panel approach to differentiate between long-run and short-run impacts of entrepreneurship on income inequality. The findings establish a robust and direct nexus between entrepreneurial activities and income disparity. The results of the two entrepreneurial indicators are stable. Besides, the coefficient of the human capital is positive in the regression and statistically significant at a 5 percent significance level. The proxies for macroeconomic factors exhibit diverse signs and impact, which suggest a policy stimulus aimed at refining macroeconomic situations and also ignite prospects for households to increase their incomes.

scholarly journals Public Debt and Economic Growth in Niger: An Autoregressive Distributed Lag Approach

2020 ◽  
Vol 1 (2) ◽  
pp. 56-65
Author(s):  
Issoufou Oumarou
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Unit Root Test ◽  
Annual Data ◽  
African Countries ◽  
Policy Makers ◽  
Significance Level ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

Purpose: The aim of the paper is to examine the existence or not of a long run or a short run relationship between public debt and economic in Niger and investigate the significance of this relationship. Approach/Methodology/Design: The study first applied time series econometrics tests such as Augmented Dickey-Fuller (ADF) unit root test, Bound cointegration test and Auto Regressive Distributed Lag (ARDL) on annual data obtained from the International monetary fund (IMF) and the West African States Central Bank (BCEAO). The observations cover the period from 1970 to 2019. The study then performed some residual tests including serial correlation, normality and heteroskedasticity for the accuracy of the prediction of the model. Findings: The empirical results showed no long run relationship between public debt and economic growth in Niger. The short run analysis revealed that public debt and budget balance have short run causal effects on economic growth in Niger. The coefficients are significant at 10% significance level. Practical Implications: This article gives valuable information to Niger policy makers regarding the effects of public debt on Niger economic growth. The article highlights the effects that public debt has on economic growth in Niger in the short and long run. Therefore helping policy makers decide whether to increase or reduce the borrowing trend. Originality/value: The results of the paper give valuable information on the relationship that public debt may have with economic growth in Sub Saharan African countries with the similar macroeconomic indicators with Niger.

scholarly journals Export Tax Reform and the Competitiveness of Imported Soybeans in China

2019 ◽  
Vol 51 (3) ◽  
pp. 511-525 ◽  
Author(s):  
Andrew Muhammad ◽  
Constanza Valdes
Keyword(s):  
United States ◽  
Tax Reform ◽  
The United States ◽  
Import Demand ◽  
Chinese Market ◽  
Long Run ◽  
Export Tax ◽  
Export Taxes ◽  
Short Run ◽  
Demand Changes

AbstractExport tax reform in Argentina could improve its competitiveness in China’s soybean market, displacing exports from competing countries like Brazil and the United States. We examined the factors that determine China’s demand for imported soybean products and how export taxes could affect exporting countries. Using import demand and vector autoregression estimates, we conducted simulations of China’s import demand assuming the elimination of export taxes in Argentina. Results indicated that Argentine soybean products could realize gains in the Chinese market, but only in the short run. Projected import demand changes in the long run were insignificant for all exporting countries.

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