synthetic control method
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2022 ◽  
Vol 18 (1) ◽  
Author(s):  
Luis L Schenoni ◽  
Pedro Feliú Ribeiro ◽  
Dawisson Belém Lopes ◽  
Guilherme Casarões

Abstract In this article, we provide a framework to analyze the foreign policy overstretch of middle powers, that is, their recent tendency to expand foreign policy goals and ambitions beyond their capabilities. We propose that overstretch results from the interaction of permissive international environments and the collusion of domestic actors to produce foreign policy myths. These myths, in turn, justify unsustainable swelling of foreign policy expenditures until they are shattered. After laying out our theory, we test it against the case of twenty-first-century Brazil. First, we document how interest groups logrolled to foster and capitalize on a “myth of multipolarity,” which, once entrenched in elite discourse and public opinion, resulted in a tangible overgrowth of foreign policy. Second, we show the extent of overstretch across four indicators—number of embassies, participation in peacekeeping operations, membership in international organizations, and aid projects overseas—using the synthetic control method to compare Brazil with a plausible counterfactual.


2021 ◽  
Vol 14 (1) ◽  
pp. 266
Author(s):  
Yuan Zhou ◽  
Yao Ji

This paper explores the impact of trade policy uncertainty (TPU) shock on China’s total factor productivity. Using economic panel data for China, OECD countries, Hong Kong SAR, Macao SAR, and Singapore from the period 2003–2019, in this paper, we treat U.S.–China trade frictional events in 2016 and 2017 as a quasi-experiment to study the impact of TPU surge on China’s TFP under the synthetic control method (SCM) and generalized synthetic control method (GSCM), treating the OECD countries, Hong Kong SAR, Macao SAR, and Singapore as a control group. We found that TPU surge has a significantly negative causal effect on China’s TFP. SCM analysis, taking 2016 (2017) as the policy implementation time, showed that the average TFP loss borne by China due to trade policy uncertainty in 2017 and 2018 was 2.7% (3.5%). The VAR model showed that China’s trade policy uncertainty reduces China’s TFP through two channels: the shrinking channel of domestic R&D innovation, and the shrinking channel of the domestic sector’s use of foreign patents. This conclusion is robust according to the GSCM. To the best of the authors’ knowledge, this paper is the first attempt to examine the long-term technological impact of TPU surge during U.S.–China trade frictional events. Our findings suggest that trade friction harms technological progress, and reducing TPU can significantly enhance innovation and TFP.


2021 ◽  
pp. 1-31
Author(s):  
Karel Kouba ◽  
Jan Pumr

Abstract Despite theoretical arguments suggesting the strong effects of presidential term limits and re-election on democracy, there is surprisingly little empirical evidence to evaluate them. We test both the effect on democracy of the existence of a consecutive re-election rule and of reforms introducing it for incumbent presidents. Using evidence from Latin American countries between 1945 and 2018, we test their relationship to both vertical and horizontal accountability. A synthetic control method is employed to account for the effect of term-limit reforms, and time-series cross-section models for modelling the association with the re-election rule. Both vertical and horizontal accountability as well as the quality of democracy are eroded by term-limit evasion reforms in most countries and strengthened in none between 1990 and 2018. Allowing presidents to run for re-election – relative to term-limited ones – is consistently associated with weak democratic outcomes.


2021 ◽  
Vol 24 (3) ◽  
pp. 441-464
Author(s):  
Rasbin Rasbin ◽  
Mohamad Ikhsan ◽  
Beta Y Gitaharie ◽  
Yoga Affandi

This paper analyses the equilibrium price of the Indonesian Rupiah using the Synthetic Control Method (SCM) and assesses its misalignments. We find evidence of Rupiah misalignment, as the currency was undervalued for most periods, except for 1993-1996. This finding is robust across model specifications, predictors, and weighting. Our finding implies that keeping the exchange rate at its equilibrium level is ideal, and that policymakers can take advantage of the undervalued currency to promote economic growth via exports.


2021 ◽  
Author(s):  
Roy Cerqueti ◽  
Raffaella Coppier ◽  
Alessandro Girardi ◽  
Marco Ventura

Summary This paper estimates the effects of non-pharmaceutical interventions – mainly, the lockdown – on the COVID-19 mortality rate for the case of Italy, the first Western country to impose a national shelter-in-place order. We use a new estimator, the augmented synthetic control method (ASCM), that overcomes some limits of the standard synthetic control method (SCM). The results are twofold. From a methodological point of view, the ASCM outperforms the SCM in that the latter cannot select a valid donor set, assigning all the weights to only one country (Spain) while placing zero weights to all the remaining. From an empirical point of view, we find strong evidence of the effectiveness of non-pharmaceutical interventions in avoiding losses of human lives in Italy: conservative estimates indicate that the policy saved in total more than 21,000 human lives.


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