scholarly journals Fiscal federalism and regional performance in Russia

2018 ◽  
Vol 4 (2) ◽  
pp. 108-132 ◽  
Author(s):  
Gabriel Di Bella ◽  
Oksana Dynnikova ◽  
Francesco Grigoli
Keyword(s):  
Fiscal Federalism ◽  
Regional Growth ◽  
Private Investment ◽  
Physical Capital ◽  
Real Income ◽  
Fiscal Sustainability ◽  
Business Climate ◽  
Regional Policies ◽  
Market Depth ◽  
Per Capita

Sound regional policies are essential for balanced and sustained economic growth. The interaction of federal and regional policies with cross-regional structural differences affects human and physical capital formation, the business climate, private investment, market depth, and competition. This paper summarizes the main elements of Russia’s fiscal federalism, describes the channels through which it operates, and assesses the effectiveness of regional transfers in reducing regional disparities. The results suggest that federal transfers to regions contributed to reducing disparities arising from heterogeneous regional tax bases and fiscal revenues. This allowed regions with initially lower per capita income to increase human and physical capital at higher rates. There is little evidence for transfers contributing to increased cross-regional growth synchronization. The results also suggest that federal transfers did not significantly improve regional fiscal sustainability, a conclusion that is supported by the lack of convergence in per capita real income across Russian regions in the last 15 years.

The Quantification of Structural Reforms in OECD Countries

2018 ◽  
Author(s):  
Balázs Égert ◽  
Peter Gal
Keyword(s):  
Product Market ◽  
Physical Capital ◽  
Oecd Countries ◽  
Market Regulation ◽  
Structural Reforms ◽  
Long Term Effects ◽  
Per Capita ◽  
Product Market Regulation ◽  
The Impact

This chapter describes and discusses a new supply-side framework that quantifies the impact of structural reforms on per capita income in OECD countries. It presents the overall macroeconomic impacts of reforms by aggregating over the effects on physical capital, employment, and productivity through a production function. On the basis of reforms defined as observed changes in policies, the chapter finds that product market regulation has the largest overall single policy impact five years after the reforms. But the combined impact of all labour market policies is considerably larger than that of product market regulation. The paper also shows that policy impacts can differ at different horizons. The overall long-term effects on GDP per capita of policies transiting through capital deepening can be considerably larger than the five- to ten-year impacts. By contrast, the long-term impact of policies coming only via the employment rate channel materializes at a shorter horizon.

Wie sinnvoll ist die Regionalpolitik der Europäischen Union?

2002 ◽  
Vol 51 (2) ◽  
Author(s):  
Jens Südekum
Keyword(s):  
Resource Allocation ◽  
Conceptual Framework ◽  
European Commission ◽  
Real Income ◽  
Free Markets ◽  
Regional Income ◽  
Regional Policies ◽  
Income Divergence ◽  
Eu Regions ◽  
European Regional

AbstractEuropean Regional Policies aim to close real income gaps between EU-regions by subsidising the economic periphery. These policies are motivated by new divergence theories in economics that imply regional income divergence as a possible result of free markets. However, the same theories identify various advantages from a spatially uneven resource allocation and do not point to an essential need for political interventions. Moreover, the European Commission in its endeavour to countervail agglomeration even pursues policies that sometimes achieve quite the opposite. Thus, this paper argues that European regional policies lack a convincing conceptual framework and should undergo substantial reforms.

scholarly journals Confidence as a Driver of Private Investment in Selected Countries of Central America

2020 ◽  
Vol 20 (270) ◽  
Author(s):  
Carlos Janada ◽  
Iulia Ruxandra Teodoru
Keyword(s):  
Interest Rates ◽  
Central America ◽  
Empirical Work ◽  
Private Investment ◽  
Business Climate ◽  
Labor Costs ◽  
Vector Error Correction ◽  
Unit Labor Costs ◽  
Global Shocks ◽  
Business Confidence

This paper argues that structural weaknesses may make private investment particularly sensitive to business confidence relative to other traditional investment drivers and global shocks. It gauges the importance of confidence over recent years in selected countries in Central America, including Costa Rica, the Dominican Republic, El Salvador, and Guatemala. Using a vector error correction model to carry out the empirical work, a system representing global activity and the domestic economy, including a set of investment drivers (interest rates, unit labor costs, and confidence) is analyzed. The findings suggest that confidence has been, on average, the most important driver of investment in these countries, exceeded only by global factors. Since confidence, arguably, can be influenced by policymakers’ decisions, structural reforms to improve the business climate and reduce uncertainty play an important role in promoting investment and economic growth.

scholarly journals AID AND GROWTH IN BANGLADESH: A REASSESSMENT

2018 ◽  
pp. 422-440
Author(s):  
Sharif Hossain ◽  
Rajarshi Mitra ◽  
Thasinul Abedin
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Inflation Rate ◽  
Government Expenditure ◽  
Real Income ◽  
Domestic Investment ◽  
Real Gdp ◽  
Long Run ◽  
Short Run ◽  
Per Capita

Although the amount of foreign aid received by Bangladesh as a share of GDP has declined over the years, Bangladesh remains one of the heavily aiddependent countries in Asia. The results of most empirical studies that have examined the effectiveness of foreign aid or other forms of development assistance for economic growth have varied considerably depending on the econometric methodology used and the period of study. As the debate and controversy over aid-effectiveness for economic growth continue to grow, this paper reinvestigates the short-run and long-run effects of foreign aid received on percapita real income of Bangladesh over the period 1972–2015. A vector error correction model is estimated. The results indicate lack of any significant short-run and long-run relation between foreign aid and per-capita real income. Results further indicate short-run unidirectional causalities from per-capita real GDP to domestic investment (in proportion to GDP), from government expenditure (in proportion to GDP) to inflation rate, from inflation rate to domestic investment (in proportion to GDP), and from domestic investment to foreign aid (as percentages of GDP). Short-run bidirectional causality is observed between per-capita electricity consumption and per-capita real GDP, and between per-capita real GDP and government expenditure (in proportion to GDP).

scholarly journals Impact of Public Debt on the Economic Growth of Pakistan.

2011 ◽  
Vol 50 (4II) ◽  
pp. 599-615 ◽  
Author(s):  
Naeem Akram
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Negative Relationship ◽  
Private Investment ◽  
Crowding Out ◽  
Per Capita Gdp ◽  
Debt Overhang ◽  
Positive Effects ◽  
Domestic Debt ◽  
Per Capita

Over the years Pakistan has failed to collect enough revenues for financing of its budget. Consequently, the problem of twin deficits emerged and to finance the developmental activities government has to rely on public external and domestic debt. The positive effects of public debt relate to the fact that in resource-starved economies debt financing if done properly leads to higher growth and adds to their capacity to service and repay public debt. The negative effects work through two main channels—i.e., ―Debt Overhang‖ and ―Crowding Out‖ effects. The present study examines the consequences of public debt for economic growth and investment in Pakistan for the period 1972-2009. It develops a hybrid model that explicitly incorporates the role of public debt in growth equations. As the some variables are I (1) and other are I (0) so Autoregressive Distributed Lag(ARDL) technique has been applied to estimate the model. Study finds that public external debt has negative relationship with per capita GDP and investment confirming the existence of ―Debt Overhang effect‖. However, due to insignificant relationships of debt servicing with investment and per capita GDP, the existence of the crowding out hypothesis could not be confirmed. Similarly, domestic debt has a negative relationship with investment and per capita GDP. In other words, it seems to have crowded out private investment. JEL classification: H63, O43, E22, C22 Keywords: Public Debt, Economic Growth, Investment, ARDL

Eurozonization of the Chinese Economy: How Do Intergovernmental Transfers Affect Local Government Debt in China?

2018 ◽  
Vol 17 (1) ◽  
pp. 1-18 ◽  
Author(s):  
Ming Lu ◽  
Huiyong Zhong
Keyword(s):  
Local Government ◽  
Government Debt ◽  
Chinese Economy ◽  
Fiscal Sustainability ◽  
Intergovernmental Transfers ◽  
Fiscal Transfers ◽  
Coastal Cities ◽  
Government Financing ◽  
Per Capita

China's local government debt has risen dramatically bringing risks to China's fiscal sustainability and long term economic growth. Using urban construction investment bonds (UCIBs) issued by local government financing vehicles (LGFVs), we study how intergovernmental fiscal transfers impact the issuance of UCIBs under China's unitary currency system. Applying instrumental variable estimation, we find that special-purpose fiscal transfers per capita are positively associated with the issuance of UCIBs. A one-RMB increase in special-purpose fiscal transfers per capita is associated with an increase in the issuance of UCIBs per capita of 0.282 RMB, whereas regular fiscal transfers (including tax rebates and general fiscal transfers) do not affect the issuance of UCIBs. Furthermore, the effect of special-purpose fiscal transfers on the issuance of UCIBs mainly exists in inland cities rather than coastal cities. This imposes risks of “eurozonization” for the Chinese economy. We also find a deterioration of refinancing in terms of issuing more UCIBs.

scholarly journals The Empirical Evaluation of the Determinants of Industrial Manufacturing in the CEMAC Zone

2019 ◽  
Vol 10 (1) ◽  
pp. 72
Author(s):  
Louis Bernard Tchekoumi ◽  
Patrick Danel Nya
Keyword(s):  
Manufacturing Sector ◽  
Empirical Evaluation ◽  
Value Added ◽  
Business Climate ◽  
Geographic Proximity ◽  
Per Capita Gdp ◽  
Absolute Value ◽  
Industrial Manufacturing ◽  
Per Capita ◽  
The Difference

The aim of this article is to assess the determinants of industrial manufacturing in the CEMAC zone. To achieve this, we make use of a gravity model on a static panel with random effects, according to the methodology proposed by Hausman-Taylor. The results show that the population, value added of the manufacturing sector, colonial links and geographic proximity have significant impacts with the expected signs. On the other hand, the difference in absolute value of per capita GDP, the business climate, financial inflows as well as actual distance are the group variables that arise as constraints to export manufacturing.

scholarly journals Macroeconomic and distributional effects of demographic change in an open economy—the case of Belgium

2020 ◽  
Vol 86 (1) ◽  
pp. 87-124
Author(s):  
Willem Devriendt ◽  
Freddy Heylen
Keyword(s):  
Open Economy ◽  
Demographic Change ◽  
Capital Investment ◽  
Physical Capital ◽  
Investment Model ◽  
Overlapping Generations Model ◽  
Endogenous Variables ◽  
Working Age ◽  
Negative Effect ◽  
Per Capita

AbstractWe construct and parameterize an overlapping generations model for an open economy with individuals who differ in innate ability. Key endogenous variables are hours worked, investment in human and physical capital, and per capita growth. The model replicates important data in Belgium since 1960 remarkably well. Simulating it, we observe that behavioral adjustments by households and firms contribute to reverse the negative arithmetical effect of future demographic change on per capita growth. Individuals work and study more. However, with unchanged policies, there remains a net negative effect on annual per capita growth of almost 0.3%-points on average in the next 25 years. This is mainly due to adverse consequences of reduced fertility and a declining working-age population on (the return to) physical capital investment. Model projections also point to rising income inequality induced by demographic change. Differences in the capacity of individuals to respond to increasing life expectancy by investing in education, and by saving, are key.

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