scholarly journals FDI Asymmetries in Emerging Economies: The Case of Colombia

2019 ◽  
Vol 11 (8) ◽  
pp. 35
Author(s):  
Jose U. Mora ◽  
Celso J. Costa Junior
Keyword(s):  
Emerging Economies ◽  
Adjustment Costs ◽  
Nominal Wage ◽  
Real Output ◽  
Empirical Results ◽  
Capital Adjustment ◽  
Long Run ◽  
Price Rigidities ◽  
Short Run ◽  
Distribution Of Income

We build a DSGE model to study the asymmetries of FDI shocks in an economy like Colombia. Besides nominal wage and price rigidities, we use the fact that Colombia has two productive and differentiated regions, Bogota that produces more than 25% of Colombia GDP (DANE, 2016) and the rest of the country, Ricardian and non-Ricardian agents, habit formation, capital adjustment costs, and modeled an entire foreign sector. Empirical results show that even when in the long run results are not very different in terms of real output, the short run effects are asymmetric implying that a shock to FDI in the rest of the country might cause important microeconomic adjustments that could improve the distribution of income throughout the country.

Give it Away Now: An Explanation of the Empirical Results of the Ultimatum and Centipede Games

2017 ◽  
Author(s):  
Liam Mulligan
Keyword(s):  
Perceived Fairness ◽  
Practical Applications ◽  
Labour Relations ◽  
Empirical Results ◽  
Long Run ◽  
Making Choices ◽  
Short Run ◽  
Future Consequences ◽  
The City ◽  
Rational Players

Economics defines individual rationality as consumers making choices that maximize their utility in anticipation of the future consequences of these choices.  In theory, a consumer will take his or her income and allocate it towards purchases that maximize his or her utility given his or her stable of reasonably static preferences (in the short run) and estimated changes to preferences in the long run.  In order for an agent to maximize his or her utility, the agent must also maximize his or her income.   However, behavioural studies on human decisions in economic games (game theory) have shown that consumers do not always maximize their income.  Two games in particular (Ultimatum and Centipede) have demonstrated that seemingly rational players may not maximize income, whether for perceived fairness, justice, or punishment.  Practical applications of these results are observed in labour relations when striking unionized employees earn less with a labour stoppage than they would have if they had avoided losing time at work.  Specifically, a seven week strike in 2008 by CUPE Local 855 (Kawartha Lakes) is examined.  It is determined that all four job types in the City of Kawartha Lakes Children’s Services department lost income because of the strike.  Reasoning and empirical results from both the Ultimatum and Centipede games will be used to explain the Union’s decision to strike and to strike for as long as they did

scholarly journals Does the Export-Led Growth Hypothesis Hold for Services Exports in Emerging Economies?

2021 ◽  
Vol 14 (27) ◽  
pp. 63-75
Author(s):  
Okpeku Lilian ONOSE ◽  
◽  
Osman Nuri ARAS ◽  
Keyword(s):  
Economic Growth ◽  
Emerging Economies ◽  
Emerging Countries ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Per Capita ◽  
Positive Effect ◽  
Growth Hypothesis

The export-led growth hypothesis states a positive relationship between the growth of exports and long-run economic growth. This study examines the validity of the export-led growth hypothesis of services exports in 5 emerging economies, including Brazil, India, Nigeria, China, and South Africa (BINCS), for the period of 1980-2019. The study employs the panel mean group autoregressive distributed lag (ARDL) procedure to identify a causal relationship between services exports and gross domestic product (GDP) per capita. The findings show that the export-led growth hypothesis in services only has a positive effect on economic growth in the short run while other variables, including foreign direct investment (FDI), gross capital formation, and labour, increase economic growth in the long run. Hence, the emerging countries should focus more on internal investment to boost growth in the long and short run.

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.

Does Financial Liberalization and Trade Openness Promote Growth in South Asia?

2010 ◽  
pp. 101-132
Author(s):  
Muhammad Arshad Kahn
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
Trade Liberalization ◽  
Inflation Rate ◽  
Financial Liberalization ◽  
Trade Openness ◽  
Real Output ◽  
Domestic Investment ◽  
Long Run ◽  
Short Run

This chapter examines the hypotheses that trade liberalization and financial liberalization jointly enhances economic growth in the four South Asian countries including Bangladesh, India, Pakistan and Sri Lanka for the period 1970-2007 using bounds testing approach to cointegration. The results suggest that in the long-run except for Bangladesh, financial development plays no role in promoting economic growth in these countries. Furthermore, the results suggest that trade openness plays a significant role in promoting economic growth in Bangladesh and India, while exerts negative effect on Pakistan and no effect on Sri Lanka. The share of domestic investment influences real output significantly in Bangladesh, India and Pakistan. In the long- as well as short-run two-way causality between real output, trade openness, share of investment and inflation rate exists for the case of Bangladesh and India. For the case of India two-way causality between finance and growth exists in the short-run. For the case of Pakistan, there is an evidence of long-run causality between real output, finance, trade openness, share of investment and inflation rate. However, in the short-run, two-way causality between real output, trade openness and share of investment is existed and one-way causality between inflation rate, trade openness and share of investment is also observed. No evidence of short-run causality between finance and growth and vice versa for Pakistan has been seen. Finally, for Sri Lanka, an evidence of long-run causality between real output, finance, trade openness and investment share has been found. In the short-run one-way causality between finance-growth, trade-finance, trade-growth and trade-investment has been obtained. These mixed results suggest that the authorities may focuses more and more on the trade liberalization. In addition, there is a need to further deepen the banking and stock markets and provide investment friendly environment to enhance domestic investment which, in turn, promotes economic growth.

Labor shares and inequality: insights from Italian economic history, 1895–19701

2020 ◽  
Author(s):  
Giacomo Gabbuti
Keyword(s):  
Income Distribution ◽  
Economic History ◽  
Italian History ◽  
The Past ◽  
Self Employment ◽  
Long Run ◽  
Short Run ◽  
Functional Distribution ◽  
Distribution Of Income

Abstract This article develops theoretical and practical motivations for studying the functional distribution of income in the past. Italy is adopted as a case study, because of the availability of long-run estimates on personal inequality and of the long-lasting incidence of self-employment. New labor shares for 1895–1970 show Italian workers accruing a low share of income until 1945; by the end of the 1950s, they rapidly converged to the European average. Italian history shows that functional income distribution deepens our understanding of long- and short-run distributional trends and makes a compelling case for approaching inequality by combining diverse sources and methodologies.

scholarly journals ON THE EFFECTIVENESS OF FISCAL DEVALUATIONS IN A MONETARY UNION

2018 ◽  
Vol 23 (8) ◽  
pp. 3424-3456 ◽  
Author(s):  
Anna Lipińska ◽  
Leopold von Thadden
Keyword(s):  
Monetary Policy ◽  
Monetary Union ◽  
Financial Integration ◽  
Fiscal Policies ◽  
Consumption Tax ◽  
Welfare Costs ◽  
Long Run ◽  
Price Rigidities ◽  
Short Run ◽  
Labor Taxes

This paper examines the effects of fiscal devaluations in a model of a monetary union characterized by national fiscal policies and supranational monetary policy. We show that a revenue-neutral permanent tax shift in one country, which raises its consumption tax to finance a cut to labor taxes, increases welfare of the monetary union in the long run. The distribution of gains among countries depends on their degree of financial integration. We also document that price rigidities result in short-run welfare costs.

Effect of economic growth, trade openness, urbanization, and technology on environment of Asian emerging economies

2018 ◽  
Vol 29 (6) ◽  
pp. 1123-1134 ◽  
Author(s):  
Kashif Munir ◽  
Ayesha Ameer
Keyword(s):  
Economic Growth ◽  
Emerging Economies ◽  
New Technologies ◽  
Trade Openness ◽  
Kuznets Curve ◽  
Stirpat Model ◽  
Causality Test ◽  
Content Type ◽  
Long Run ◽  
Short Run

Purpose The purpose of this paper is to analyze the long-run as well as short-run effect of economic growth, trade openness, urbanization and technology on environmental degradation (sulfur dioxide (SO2) emissions) in Asian emerging economies. Design/methodology/approach The study utilizes the augmented STIRPAT model and uses the panel cointegration and causality test to analyze the long-run and short-run relationships. Due to the unavailability of data for all Asian emerging economies, the study focuses on 11 countries, i.e. Bangladesh, Hong Kong, India, Indonesia, Iran, Malaysia, Pakistan, Philippines, Singapore, Sri Lanka and Thailand, and uses balance panel from 1980 to 2014 at annual frequency. Findings Results showed that the inverted U-shape hypothesis of the environmental Kuznets curve holds between economic growth and SO2 emissions. While technology and trade openness increases SO2 emissions, urbanization reduces SO2 emissions in Asian emerging economies in the long run. Unidirectional causality flows from urbanization to SO2 emissions and from SO2 emissions to economic growth in the short run. Practical implications Research and development centers and programs are required at the government and private levels to control pollution through new technologies as well as to encourage the use of disposed-off waste as a source of energy which results in lower dependency on fossil fuels and leads to reduce emissions. Originality/value This study contributes to the existing literature by analyzing the effects of urbanization, economic growth, technology and trade openness on environmental pollution (measured by SO2 emissions) in Asian emerging economies. This study provides the essential evidence, information and better understanding to key stakeholders of environment. The findings of this study are useful for individuals, corporate bodies, environmentalist, researchers and government agencies at large.

The Volatility for Pre and Post Global Financial Crisis

2011 ◽  
Vol 2 (2) ◽  
pp. 82-95
Author(s):  
Shih-Yung Wei ◽  
Jack J. W. Yang ◽  
Jen-Tseng Chen ◽  
Wei-Chiang Samuelson Hong
Keyword(s):  
Hong Kong ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Asset Returns ◽  
Financial Asset ◽  
Asymmetric Volatility ◽  
Empirical Results ◽  
Long Run ◽  
Short Run ◽  
Financial Asset Returns

The asymmetric volatility, temporary volatility, and permanent volatility of financial asset returns have attracted much interest in recent years. However, a consensus has not yet been reached on the causes of them for both the stocks and markets. This paper researched asymmetric volatility and short-run and long-run volatility through global financial crisis for eight Asian markets. EGARCH and CGARCH models are employed to deal with the daily return to examine the degree of asymmetric volatility (temporary volatility and permanent volatility). The authors find that after global financial crisis asymmetric volatility is lower (expect Hong Kong), and the long-run effect is more than the short-run effect. The empirical results for the short-run show that, after global financial crisis, there is significant decreasing in China and Taiwan but not in Japan; the others are significantly increasing. For the long-run, there is significant decreasing (except Thailand and Korea).

scholarly journals Asymmetric Price Transmission of World Prices to Kenyan Tea Market

2020 ◽  
Author(s):  
Vincent Ngeno
Keyword(s):  
Price Transmission ◽  
Asymmetric Adjustment ◽  
Close Link ◽  
Empirical Results ◽  
Current Period ◽  
Long Run ◽  
Asymmetric Price Transmission ◽  
The World ◽  
Domestic Prices ◽  
Short Run

Abstract The use of asymmetrical threshold cointegration test is adopted in this study to investigate whether any significant relationship or asymmetric adjustment exists in transmission of prices between the world tea market and domestic prices in Kenya. The empirical results obtained are as follows. First, we verify a close link between the Kenya’s tea price and its international counterparts under the current period of market liberalization. Second, empirical results demonstrate that in both long run and short run, the price transmission between world tea market and Kenyan domestic market are nonlinear and asymmetric, suggesting long run and short run dynamic inefficiencies and presence of transaction costs.JEL classification: C32, Q13, Q17

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