scholarly journals Mining Spillovers in Chile

2017 ◽  
Vol 17 (177) ◽  
Author(s):  
Esther Perez Ruiz
Keyword(s):  
Open Economy ◽  
Small Open Economy ◽  
The Other ◽  
Price Shocks ◽  
Production And Consumption ◽  
Tradable Sector ◽  
Sector Type ◽  
Effect Of Copper ◽  
Two Sectors ◽  
Positive Spillovers

Chile’s small open economy with significant mismatch between the production and consumption baskets may be represented by three stylized sectors, a commodity sector, a non-commodity tradable sector, and a non-tradable sector. This paper estimates the effect of copper price shocks on mining, manufacturing, and construction—each embodying a sector type. The empirical findings are for positive spillovers from mining to the other two sectors. However, the estimated size of the spillovers seems modest, which raises the question of the potential for mining to be better integrated with the rest of the economy.

On the First-Round Effects of International Food Price Shocks

2018 ◽  
Author(s):  
Rafael Portillo ◽  
Luis-Felipe Zanna
Keyword(s):  
Developing Countries ◽  
Open Economy ◽  
Small Open Economy ◽  
Food Price ◽  
Relative Price ◽  
Asset Market ◽  
Price Shocks ◽  
Market Structures ◽  
Model Features ◽  
Food Share

The chapter presents a small open-economy model to study the first-round effects of international food-price shocks in developing countries. First-round shocks are defined as changes in headline inflation that, holding core inflation constant, help implement relative price adjustments. The model features three goods (food, a generic traded good, and a non-traded good), varying degrees of tradability of the food basket, and alternative international asset market structures. First-round effects depend crucially on the asset market structure. Under complete markets, inter-temporal substitution prevails, making the inflationary impact of international food price shocks proportional to the food share in consumption, which in developing countries is typically large. Under financial autarky, the income channel is dominant, and first-round effects are instead proportional to the country’s food trade balance, which is typically small. The results cast some doubt on the view that international food price shocks inherently have large inflationary effects in developing countries.

scholarly journals Context in international business: Entrepreneurial internationalization from a distant small open economy

2021 ◽  
Author(s):  
Eldrede Kahiya
Keyword(s):  
New Zealand ◽  
Literature Review ◽  
International Business ◽  
Open Economy ◽  
Institutional Environment ◽  
Small Open Economy ◽  
The Other ◽  
Medium Size ◽  
Strategy Process ◽  
Context Shapes

Context matters in International Business, but to what extent does it influence the content of knowledge? This study offers a systematic literature review on the internationalization of New Zealand firms. A geographically isolated small open economy (SMOPEC) with audacious trade aspirations, a strong domestic institutional environment, favorable attitude toward trade, and entrepreneurial small-to-medium size enterprises (SMEs), New Zealand provides an enlightening context to study internationalization. Using a sample of 95 studies, the review identifies antecedents, stimuli, capabilities, strategy, process and outcomes underpinning internationalizing New Zealand firms (INZFs). Context matters but not in the manner anticipated. On one hand research on the internationalization of New Zealand firms is largely congruent with extant knowledge, on the other the New Zealand context shapes uniquely, how and what scholars choose to research.

scholarly journals Globalization, Endogenous Oil Price Shocks and Chinese Economic Activity

2017 ◽  
Vol 22 (2) ◽  
pp. 39-64
Author(s):  
Gulzar Khan ◽  
Adiqa Kiani ◽  
Ather Maqsood Ahmed
Keyword(s):  
Open Economy ◽  
Aggregate Demand ◽  
Small Open Economy ◽  
Oil Prices ◽  
Chinese Economy ◽  
Oil Price ◽  
Economic Conditions ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Macroeconomic Activity

Using a structural vector autoregressive model, this study investigates the extent to which international oil price shocks have influenced the Chinese economy over the period 1991–2014. Given China’s intensified macroeconomic activity and its increasing demand for energy resources, we also examine the endogenous response of international oil prices to economic conditions in the country. To that end, we derive and empirically estimate a small open-economy New Keynesian model for China and the rest of the world. Our results show that the Chinese economy is relatively more sensitive to global economic conditions than to domestic policy actions. Global productivity shocks appear to be the most important variable causing Chinese macroeconomic activity through trade, where oil prices impact aggregate demand negatively.

scholarly journals BUSINESS CYCLES, GROWTH, AND IMPORTED ENERGY IN A SMALL-OPEN GROWTH MODEL

2018 ◽  
Vol 3 (2) ◽  
pp. 7-21 ◽  
Author(s):  
Wei-Bin Zhang
Keyword(s):  
Business Cycles ◽  
Growth Model ◽  
Open Economy ◽  
Small Open Economy ◽  
Economic Growth Model ◽  
Constant Coefficients ◽  
Open Growth ◽  
Two Sectors ◽  
Neoclassical Growth Theory ◽  
Neoclassical Growth

This paper generalizes an economic growth model proposed by Zhang (2017) by allowing all constant coefficients to be time-dependent. This paper shows existence of business cycles in the generalized model due to periodic shocks. Zhang’s original model is developed for a small open economy with imported energy and imported goods. The economy is composed of two sectors and all markets are perfectly competitive. The economy has fixed land and population. Production side is the same as in neoclassical growth theory, while demand side is modelling with Zhang’s utility and concept of disposable income. We generalize and simulate the model. We demonstrate existence of business cycles due to different exogenous periodic shocks.

Globalisation, crime and wage inequality: a theoretical analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Manash Ranjan Gupta
Keyword(s):  
General Equilibrium ◽  
Wage Inequality ◽  
Open Economy ◽  
Small Open Economy ◽  
The Other ◽  
Skilled Workers ◽  
Production Sector ◽  
Content Type ◽  
Unskilled Labour ◽  
Rental Rate

Purpose This study aims to focus on the effects of economic globalisation programme on the problems of criminal activities and on the degree of skilled–unskilled wage inequality. Design/methodology/approach A competitive general equilibrium model of a small open economy is developed. Unskilled labour moves from the production sector to the criminal sector. Those who join the criminal sector snatch a part of capitalists’ income and skilled workers’ income to finance their consumption and face positive probability of being caught and punished. The size of the criminal sector and the rental rate on capital are simultaneously determined in the short-run equilibrium of this model where factor endowments are exogenously given at a particular point of time. Findings An increase in the capital endowment resulting from an exogenous foreign capital inflow raises demand for labour and wage rates in both the sectors. So, it lowers the rental rate on capital and thus aggravates the problem of skilled–unskilled wage inequality because the skilled labour using sector is more capital intensive than the other production sector. However, it may lower the size of the criminal sector and thus may raise the level of the gross domestic product. Originality/value There exists substantial theoretical works on the problem of skilled–unskilled wage inequality, but none of these works focuses on the general equilibrium allocation of unskilled labour to the criminal sector. On the other hand, existing models specialised to analyse theoretical implications of crime and punishment do not focus on the interaction between crime and wage inequality.

scholarly journals DYNAMIC EFFECTS OF OIL PRICE SHOCKS AND THEIR IMPACT ON THE CURRENT ACCOUNT

2013 ◽  
Vol 18 (2) ◽  
pp. 316-337 ◽  
Author(s):  
Stefan F. Schubert
Keyword(s):  
Current Account ◽  
Open Economy ◽  
Small Open Economy ◽  
Oil Price ◽  
Dynamic Effects ◽  
Price Shocks ◽  
J Curve ◽  
Nonseparable Preferences ◽  
Imported Oil ◽  
The Current Account

We study the dynamic effects of an oil price shock on key economic variables and on the current account of a small open economy. We introduce time-nonseparable preferences into a standard model of a small open economy, where imported oil is used both as an intermediate input in production and as a consumption good. Using a plausible calibration of the model, we show that the changes in output and employment are quite small, and that the current account exhibits the J-curve property, both being in line with recent empirical evidence. After an oil price increase, employment falls and the current account first deteriorates. Over time, with gradually falling expenditures, the trade balance improves sufficiently to turn the current account into a surplus. The model thus provides a plausible explanation of recent empirical findings.

scholarly journals Undervaluation, Financial Development, and Economic Growth

2017 ◽  
Vol 34 (1) ◽  
pp. 116-143
Author(s):  
Jingxian Zou ◽  
Yaqi Wang
Keyword(s):  
Economic Growth ◽  
Financial Markets ◽  
Financial Development ◽  
Open Economy ◽  
Small Open Economy ◽  
Borrowing Constraints ◽  
Economic Growth Rate ◽  
Percentage Point Increase ◽  
Point Increase ◽  
Tradable Sector

This paper analyzes the effect of undervaluation on economic growth in the presence of borrowing constraints. Based on a two-sector, small open-economy model, we show that undervaluation can promote economic growth by partly correcting distortions in financial markets through the channels of increased within-sector productivity and the relative share of the tradable sector in an economy. Such an effect is magnified amid tight borrowing constraints. We empirically test the theoretical conclusions using cross-economy data for the period 1980–2011. For economies whose level of financial development lies at the 25th percentile of our sample, a 50% undervaluation can boost the economic growth rate by 0.3 percentage points. There is an additional 0.045 percentage point increase in economic growth with a 10% decline in the financial development measure.

Sign in / Sign up

Export Citation Format

Share Document