renewable and non renewable energy growth emissions linkages review of emerging trends with policy implications abstract this study is an extension of the previous studies which focused mainly on energy growth nexus but fails to consider the carbon emission implication of this relationship the methodology of the study permits a comprehensive and comparative analysis of existing studies on renewable and non renewable energy growth emission nexus in order to draw some implications for policy and research the survey revealed the extent of the spread of studies across issues time and geographical space countries and regions it also disclosed the range of methodological approaches adopted to analyse the issues over time and the frequency of their use it unravelled the varied findings across countries and regions given the diverse methods employed and specific features of the economies analysed arising from the literature survey this study highlights the existing gaps in the literature and new direction for policy and research the general policy implication of the findings of this study is that pollution effect of energy growth nexus should be taken into consideration in policy formulation for sustainable development further the design of regional and global policies should recognise the fact that energy growth emission linkages varied across countries even in the same region some new direction for research on renewable and non renewable energy growth emission linkages pointed out in this survey includes the following future research on energy growth nexus without considering the pollution impact may not contribute so much to the literature studies should investigate the substitution complementary effects of the energy varieties on growth emission nexus while new methodological contributions are imperative

renewable energy consumption and industrial production a disaggregated time frequency analysis for the u s abstract this paper aims to analyze the interaction between renewable energy consumption and industrial production for the u s over the 1981 2018 period we contribute to the existing literature by the disaggregation of renewable energy sources hydropower geothermal and biomass by the consideration of time and frequency through wavelet techniques and the time varying granger causality test recently proposed by shi et al 2018 based on monthly data wavelet results show a positive co movement between industrial production and biomass energy consumption at low frequencies meaning in the long term only the bootstrap rolling window granger causality test indicates a bi directional predictability between renewable energy consumption and industrial production in crisis and turmoil periods only these results are found to be robust to the inclusion of control variables non renewable energy consumption and crude oil prices and to the selection of the lag length for the corresponding var model

the impact of renewable energy consumption to economic growth a panel data application internationally the importance of renewable energy in the energy mix has been increasingly appreciated the advantages of the renewable energy usage for the world s energy security and the environment are indisputable and much discussed in the literature however its effects on the economic welfare of the countries are yet to be examined fully and described quantitatively the purpose of this paper is to estimate the impact of the renewable energy consumption to economic welfare by employing panel data techniques the results show that the influence of renewable energy consumption or its share to the total energy mix to economic growth is positive and statistically significant from a policy point of view promoting renewable energies bears benefits not only for the environment but also for the economic conditions of the countries

energy consumption and economic growth new insights into the cointegration relationship abstract this paper examines the long run relationship between energy consumption and real gdp including energy prices for 25 oecd countries from 1981 to 2007 the distinction between common factors and idiosyncratic components using principal component analysis allows to distinguish between developments on an international and a national level as drivers of the long run relationship indeed cointegration between the common components of the underlying variables indicates that international developments dominate the long run relationship between energy consumption and real gdp furthermore the results suggest that energy consumption is price inelastic causality tests indicate the presence of a bi directional causal relationship between energy consumption and economic growth

on the causal dynamics between emissions nuclear energy renewable energy and economic growth this paper examines the causal relationship between co2 emissions nuclear energy consumption renewable energy consumption and economic growth for a group of 19 developed and developing countries for the period 1984 2007 using a panel error correction model the long run estimates indicate that there is a statistically significant negative association between nuclear energy consumption and emissions but a statistically significant positive relationship between emissions and renewable energy consumption the results from the panel granger causality tests suggest that in the short run nuclear energy consumption plays an important role in reducing co2 emissions whereas renewable energy consumption does not contribute to reductions in emissions this may be due to the lack of adequate storage technology to overcome intermittent supply problems as a result electricity producers have to rely on emission generating energy sources to meet peak load demand

the asymmetric granger causality analysis between energy consumption and income in the united states abstract we investigated granger causality between variants of the energy consumption sources and gross domestic product gdp for the united state of america usa to accomplish this objective we utilized a recent approach of asymmetric granger causality developed by hatemi j for the period january 1973 october 2011 our results indicated presence of asymmetric granger causality between a few variants of energy consumption sources i e coal consumption cc natural gas consumption ng primary energy consumption pe and total renewable energy consumption tre and gdp all measured in growth rates additionally when positive shocks are analyzed we found the evidence of unidirectional granger causality running from gdp growth rate to growth rate of cc and from growth rate of total electricity end use ec to gdp growth rate additionally we find significant evidence of bidirectional granger causality between ng and gdp pe and gdp and tre and gdp all measured in growth rates however in case of negative shocks we find that the null hypothesis that growth rates in cc and tre do not granger cause gdp growth rate is rejected at 5 level of significance these results have important implications for research analysts as well as policy makers of the usa economy

citizens preferences and the portfolio of public goods evidence from nigeria summary developing countries have undertaken decentralization reforms to increase the efficiency of public goods provisioning by tailoring the goods to the preferences of smaller groups the reforms aim to ensure that the resulting supply of public goods matches local demands we analyze if local politicians tasked with supplying public goods in a developing country respond to citizens preferences we ask two questions first faced with demands for increased spending on a particular type of public good will politicians increase the overall spending on public goods or keep it constant while reallocating resources between different public goods second if politicians reallocate resources rather than increase overall spending which public good will receive additional funds at the expense of another good we examine these questions using sub national spending and preference data in nigerian districts our empirical strategy accounts for interdependency between spending areas as increased spending in one area can be offset by decreasing expenditures elsewhere we find that local politicians reallocate resources across education health infrastructure and agricultural support to match the preference profile of citizens across these goods but do not increase overall spending for public goods

environmental pollution hydropower energy consumption and economic growth evidence from g7 countries abstract the aim of this study is to examine the relationship among environmental pollution economic growth and hydropower energy consumption in the different regimes of the business cycles for g7 countries over the period of 1961 2013 we used markov switching vector autoregressive ms var and ms granger causality methods to achieve this goal since the traditional methods examine the causality by assuming all period in the same level unlike traditional methods these methods allow for determining the relationship and casual dynamics between variables in different regimes the causality results obtained for different regimes assisted to suggest policy recommendations for each regime individually according to analysis results it was found that there is bidirectional granger causality between carbon dioxide emissions and economic growth in the crisis regime and in the high growth regime while carbon dioxide emissions are granger cause of economic growth in all regimes in general we found evidence that hydropower energy consumption is granger cause of economic growth in general whereas there is a bidirectional causality for some g7 countries furthermore the results from these models indicate that in the first second and third regimes carbon dioxide emissions are granger cause of hydropower energy consumption and hydropower energy consumption is granger cause of carbon dioxide emissions for some g7 countries

economic growth and energy consumption causal nexus viewed through a bootstrap rolling window one puzzling results in the literature on energy consumption economic growth causality is the variability of results particularly across sample periods sample sizes and model specification in order overcome these issues this paper analyzes the causal links between energy consumption and economic growth for g 7 countries using bootstrap granger non causality tests with fixed size rolling subsamples the data used includes annual total energy consumption and real gross domestic product gdp series from 1960 to 2006 for g 7 countries excluding germany for which the sample period starts from 1971 using the full sample bootstrap granger causality test we find that there is predictive power from energy consumption to economic growth only for canada however parameter instability tests show that none of the estimated models have constant parameters and hence the full sample results are not reliable analogous to the full sample results the results obtained from the bootstrap rolling window estimation indicate no consistent causal links between energy consumption and economic growth we however find that causal links are present between the series in various subsamples furthermore these subsample periods correspond to significant economic events indicating that the findings are not statistical artefacts but correspond to real economic changes our results encompass previous findings and offer an explanation to varying findings

renewable energy consumption economic growth nexus in turkey abstract this paper examines the renewable energy consumption economic growth causality nexus in turkey studies in the literature can be grouped as country specific and multi country studies the results of these studies are inconsistent and there is no agreement on the existence or the direction of causality between renewable energy consumption and economic growth the results of this country specific study support conservation hypothesis the results of empirical tests from ardl approach show that renewable energy consumption has a negative impact on economic growth and the ones of toda yamamoto causality tests show that there is a unidirectional causality running from economic growth to renewable energy consumption

the renewable energy and economic growth nexus in black sea and balkan countries the aim of this study is to explore the relationship between renewable energy consumption and economic growth within the framework of traditional production function for the period of 1990 2012 in 9 black sea and balkan countries for this purpose we use pedroni 1999 2004 panel cointegration pedroni 2000 2001 co integration estimate methods and dumitrescu and hurlin 2012 heterogeneous panel causality estimation techniques the study has concluded that there is a long term balance relationship between renewable energy consumption and economic growth and renewable energy consumption has a positive impact on economic growth heterogeneous panel causality analysis results support growth hypothesis in bulgaria greece macedonia russia and ukraine feedback hypothesis in albania georgia and romania neutrality hypothesis in turkey and according to the panel data set including all nine countries the results support feedback hypothesis with the findings it was concluded that there is a significant impact of renewable energy consumption on economic growth in balkan and black sea countries

renewable energy oil prices and economic activity a granger causality in quantiles analysis this paper analyzes the causal relationship between renewable energy consumption oil prices and economic activity in the united states from july 1989 to july 2016 considering all quantiles of the distribution although the concept of granger causality is defined for the conditional distribution the majority of papers have tested granger causality using conditional mean regression models in which the causal relations are linear we apply a granger causality in quantiles analysis that evaluates causal relations in each quantile of the distribution under this approach we can discriminate between causality affecting the median and the tails of the conditional distribution we find evidence of bi directional causality between changes in renewable energy consumption and economic growth at the lowest tail of the distribution besides changes in renewable energy consumption lead economic growth at the highest tail of the distribution our results also support the unidirectional causality from fluctuations in oil prices to economic growth at the extreme quantiles of the distribution finally we find evidence of lower tail dependence from changes in oil prices to changes in renewable energy consumption our findings call for government policies aimed at developing renewable energy markets to increase energy efficiency in the u s

the energy growth nexus reconsidered persistence and causality abstract this article applies a recent econometric framework to the analysis of the relationship between energy consumption and economic growth in the us which allows a joint study of causality and persistence we provide evidence suggesting a nonlinear relationship with a structural break in the most recent regime we find that gdp causes energy consumption and vice versa furthermore both series show persistence i e cyclical and natural components do not evolve independently thus policies oriented to the reduction of energy consumption could constrain economic growth and policy shocks can have permanent effects

nexus between clean energy consumption economic growth and co2 emissions abstract to investigate the nexus among clean energy consumption economic growth and co2 emissions a newly developed bootstrap ardl bounds test with structural breaks is employed to survey the cointegration and causality for g7 countries we find no cointegration among real gdp per capita clean energy consumption and co2 emissions in canada france italy the us and the uk however cointegration exists in germany when real gdp per capita and co2 emissions serve as dependent variables and in japan when co2 emissions is the dependent variable regarding the results of causality test that we find clean energy consumption causes real gdp per capita for canada germany and the us and co2 emissions causes clean energy consumption for germany besides we find feedbacks between clean energy consumption and co2 emissions for germany and unidirectional causality running from clean energy consumption to co2 emissions for the us our study has important policy implications for g7 countries conducting efficient energy use strategy to reduce co2 emissions

does the level of energy intensity matter in the effect of energy consumption on the growth of transition economies evidence from dynamic panel threshold analysis abstract this study investigates whether the effect of energy consumption on economic growth differs by the level of energy intensity we employ an advanced dynamic panel threshold regression model to test for the threshold level of energy intensity that has an asymmetrical energy consumption effect on economic growth we consider 12 commonwealth of independent states countries over the period 1991 2013 the estimated panel threshold regression model suggests 0 44 as the threshold level of energy intensity energy consumption above this level significantly retards economic growth whereas energy consumption below the level is found to have a statistically significant positive effect on economic growth thus when the threshold level of energy intensity one of the important indicators of energy efficiency is exceeded energy consumption significantly hinders growth if policy makers pay more attention to energy intensity while formulating new energy policies substantial gains can be achieved in low energy intensity environments

renewable and non renewable energy consumption and economic activities further evidence from oecd countries this article examines the dynamic relationship between renewable and non renewable energy consumption and industrial output and gdp growth in oecd countries using data over the period of 1980 2011 the panel cointegration technique allowing structural breaks is used for empirical investigation the results show that there is a long term equilibrium relationship among non renewable and renewable energy sources industrial output and economic growth the panel causality analyses show bidirectional causality between industrial output and both renewable and non renewable energy consumption in the short and long run however there is evidence of bidirectional short run relationship between gdp growth and non renewable energy consumption while unidirectional causality between gdp growth and renewable energy consumption these results indicate that oecd economies still remain energy dependent for their industrial output as well as overall economic growth however expansion of renewable energy sources is a viable solution for addressing energy security and climate change issues and gradually substituting renewable to non renewable energy sources could enhance a sustainable energy economy

impacts of renewable energy consumption on the german economic growth evidence from combined cointegration test abstract germany is the largest economy in europe and the leading renewable energy user comparable to none in the entire of the european continents it is in reference to these developments that this study investigates whether the impacts of renewable energy have consolidated the economic growth prospects of the country to ensure this quarterly time series data from 1971q1 to 2013qiv was used the study employed the clemente montanes reyes detrended structural break test the bayer hanck combined cointegration test and the ardl bounds testing approach to cointegration in addition the causality analysis was observed using vecm granger causality framework the results confirmed the existence of cointegration among the variables the results show that renewable energy consumption in germany consolidates the country s economic growth prospects to the extend that a 1 increase in renewable energy consumption boosts german economic growth by 0 2194 in addition to that a 1 increase in capital lead to the rise in economic growth by 1 1320 while a 0 5125 increase in economic growth is due to 1 increase in labor productivity the causality analysis on the other hand revealed the existence of feedback effect between renewable energy consumption and economic growth while the relationship between renewable energy consumption and capital is found to be bidirectional and same inference was found to exist between capital and economic growth the study proposes solid mechanisms that will help in averting renewable energy market failure locally and internationally among others

the effect of electricity consumption from renewable sources on countries economic growth levels evidence from advanced emerging and developing economies abstract this paper uses a sample of 36 countries for the time period 1990 2011 in order to examine the relationship between countries electricity consumption from renewable sources and gross domestic product gdp levels several nonparametric techniques are applied to investigate the effect of electricity consumption from several renewable sources including wind geothermal solar biomass and waste on countries gdp levels when investigating the whole sample ignoring countries economic development status the results reveal an increasing relationship up to a certain gdp level which after that point the effect of electricity consumption on gdp stabilises however when analyzing separately the emerging markets and developing economies and the advanced developed economies the results change significantly for the case of emerging market and developing economies the relationship appears to be highly nonlinear an m shape form indicating that on those countries the levels of electricity consumption from renewable sources will not result on higher gdp levels in contrast for the case of the advanced economies the results reveal an increasing nonlinear relationship indicating that higher electricity consumption levels from renewable sources results to higher gdp levels this finding is mainly attributed to the fact that in the advanced developed economies more terawatts from renewable sources are generated and consumed compared to the emerging market and developing economies which traditionally their economies rely on non renewable sources for power generation and consumption

considering the effect of biomass energy consumption on economic growth fresh evidence from brics region abstract this paper investigates the relationship between biomass energy consumption and economic growth by incorporating capital and trade openness in production function for the case of brics countries in doing so unit root and cointegration tests have been used in order to examine unit root properties and long run relationship between the series for the period of 1991q1 2015q4 the results confirm the presence of long run equilibrium relationship between the variables moreover biomass energy consumption stimulates economic growth capital increments economic growth and trade openness spurs economic growth the feedback effect exists between biomass energy consumption and economic growth trade openness granger causes economic growth capital and biomass energy consumption the policy to adopt biomass as the primary source of renewable energy helps brics countries to achieve sustainable development goal in both short run and long run however the key innovative point of this study is to establish the sign for granger causality test

effects of global liquidity on commodity and food prices summary this article investigates the relationship between global liquidity and commodity and food prices applying a global cointegrated vector autoregressive model we use different measures of global liquidity and various indices of commodity and food prices for the period 1980 2011 our results support the hypothesis that there is a positive long run relation between global liquidity and the development of food and commodity prices and that food and commodity prices adjust significantly to this cointegrating relation global liquidity in contrast does not adjust it drives the relationship

use renewables to be cleaner meta analysis of the renewable energy consumption economic growth nexus abstract the renewable energy consumption economic growth nexus is a growing area of research over the last few years emanating to mixed results the aim of the current study is to quantitatively synthesise the empirical literature on the subject using the meta analysis approach in particular a meta multinomial regression is employed to investigate the sources of variation in the direction of causality between renewable energy consumption and economic growth this causal relationship takes the form of four hypotheses namely the feedback conservation growth and neutrality hypotheses to the best of author s knowledge this study constitutes the first meta analysis undertaken on the renewable energy consumption economic growth nexus the empirical results reveal that the variation in the supported hypotheses is due to a number of characteristics including model specification data characteristics estimation techniques cointegration methods and causality tests and development level of the country on which a study was conducted

assessment of financial development on environmental effect implications for sustainable development abstract this study observes the causal relationships between globalization urbanization financial development consumption of renewable energy and emissions of co2 in order to asses the implications for sustainable development it employs panel data of the top ten co2 emitter countries japan usa south korea germany iran canada saudi arabia china india and russia from 1990 to 2016 panel co integration panel fully modified least squares pfmols and panel vector error correction model vecm tests are used to analyse the data of the study an empirical result of the panel vecm test reveals unidirectional long term causality from co2 to financial development fd and globalization glob to urban population up the results of the pfmols test show that there are significantly long term positive relationships of fd and up with co2 emissions renewable energy consumption has a significantly negative relationship with emissions of co2 furthermore it is recommended to enhance renewable energy consumption in order to lower carbon emissions for sustainable development in the top ten emitter countries

an investigation of renewable and non renewable energy consumption and economic growth nexus using industrial and residential energy consumption abstract our study shows that links between economic growth and energy consumption both expressed in per capita terms differed for renewables and non renewables for income panels over the period 1971 to 2011 renewables are mainly found to support the neutrality hypothesis only renewable totals in low and lower middle income llmi countries are found to drive economic growth the feedback growth and conservative hypotheses strongly feature with non renewables total and industrial our results are derived by linking different definitions of energy consumption with economic growth for 89 countries divided into llmi upper middle income umi and high income hi panels

energy consumption economic growth and prices a reassessment using panel vecm for developed and developing countries this paper reinvestigates the energy consumption gdp growth nexus in a panel error correction model using data on 20 net energy importers and exporters from 1971 to 2002 among the energy exporters there was bidirectional causality between economic growth and energy consumption in the developed countries in both the short and long run while in the developing countries energy consumption stimulates growth only in the short run the former result is also found for energy importers and the latter result exists only for the developed countries within this category in addition compared to the developing countries the developed countries elasticity response in terms of economic growth from an increase in energy consumption is larger although its income elasticity is lower and less than unitary lastly the implications for energy policy calling for a more holistic approach are discussed c 2006 elsevier ltd all rights reserved

energy consumption and economic growth in vietnam abstract this study attempts to analyse the relationship between energy consumption and economic growth in vietnam using the neoclassical solow growth framework for the 1971 2011 period the concept and methods of cointegration and granger causality are used to establish the relationship between the variables of interest our results confirm the existence of cointegration among the variables in particular energy consumption fdi and capital stock were found positively influence economic growth in vietnam the granger causality test revealed unidirectional causality running from energy consumption to economic growth hence vietnam is an energy dependent economy and any energy or environment policy drawn up in an attempt to conserve energy will jeopardise the process of economic development in vietnam for this reason the renewable energy policy should be given attention to provide sufficient supplies of energy to speed up economic expansion investment in r d may be required to incentivise private public institutions to engage in this innovation while the awareness for energy saving policy among public could be integrated to meet social economic development

explaining the size of the public sector this paper aims at providing an explanation for the size of the public sector based on the idea of social insurance the main assumption made is that the public sector is less efficient but also less volatile than the private sector the demand driven level of the public sector that is derived as the one that maximizes the utility of the representative employed consumer depends positively on the variance of private output an increase in the size of the public sector has a positive effect on expected employment and a negative effect on expected consumption the size of the public sector set by the government which maximizes the probability of being re elected will be higher than the demand driven level if voters preferences for employment is higher than the consumption loss associated with public employment

modelling the treatment effect of renewable energy policies on economic growth evaluation from mena countries abstract this paper investigates the effects of renewable energy re policies on economic growth in mena countries using the propensity score matching methodology our empirical analysis conducted on a sample of 24 economies 17 re and 7 non re countries from 1980 to 2012 shows that the treatment effect of re policies has a significant and positive impact on stimulating and promoting economic growth in mena economies that have implemented these energy policies re policies alone however are not sufficient this change requires the collective long term commitment of all stakeholders including governments citizens financiers private companies and international agencies this would help impede policy overlaps and incoherence as well as consequently improve the overall policy effectiveness

energy consumption and economic growth in the usa evidence from renewable energy abstract recent debates about renewable energy consumption manifest two main expectations firstly renewable energy consumption should contribute to economic growth and secondly it should not cause damage on environment this study focuses on the first issue by applying toda yamamoto procedure and bootstrap corrected causality test for the us since empirical literature criticizes the toda yamamoto test which bases on asymptotic distribution the models consist of real gdp employment investment and kinds of renewable energy consumption only one causal relationship was found from biomass waste derived energy consumption to real gdp no causal relationship was found between real gdp and all of the other renewable energy kinds total renewable energy consumption geothermal energy consumption hydro electric energy consumption biomass energy consumption and biomass wood derived energy consumption that is using of energy from waste cause not only solving the dumping problems but also it contributes to real gdp for policy purpose the results of this study suggest that countries should concentrate on energy producing from waste as an alternative energy resource

the relationship between energy consumption energy prices and economic growth time series evidence from asian developing countries this paper estimates the causal relationships between energy consumption and income for india indonesia the philippines and thailand using cointegration and error correction modelling techniques the results indicate that in the short run unidirectional granger causality runs from energy to income for india and indonesia while bidirectional granger causality runs from energy to income for thailand and the philippines in the case of thailand and the philippines energy income and prices are mutually causal the study results do not support the view that energy and income are neutral with respect to each other with the exception of indonesia and india where neutrality is observed in the short run c 2000 elsevier science b v all rights reserved jel classifications c22 q43 q48

the cyclicality of price cost margins in banking an empirical analysis of its determinants i introduction in this paper we study the cyclical behavior of price cost margins in banking calculated as the difference between the interest rate on loans and deposits using time series quarterly data for the period 1979 2005 in the united states this cyclical behavior of banks price cost margins a key fact about business fluctuations has received little attention before dueker and thornton 1997 find evidence that in cyclical downturns banks opt for a relatively high price cost margin however they focus exclusively on the markup of the bank prime lending rate over the marginal cost of funds for banks mandelman 2006 presents evidence on the cyclicality of margins for a large sample of countries and uses foreign bank penetration to explain the behavior of margins 1 in olivero 2005 aliaga diaz 2006 and aliaga diaz and olivero 2010a we document the countercyclicality of banks price cost margins in the united states in that paper we do so using an atheoretical methodology based on var forecast errors to measure comovement between variables 2 in this paper we build on this atheoretical evidence and take a step further by constructing an empirical model of the determinants of the cyclical behavior of margins here we take a theory based approach to decide on the inclusion of the relevant regressors that belong to this model doing so allows us to contribute to the literature by providing potential explanations for the previously documented countercyclical nature of margins monetary policy and credit risk could be suggested as the main and potentially the only determinants of the cyclical behavior of margins on the one hand the bank lending channel of monetary transmission predicts that the federal funds rate as a monetary policy indicator and margins are directly related therefore if policy rates exhibit a particular cyclical behavior not controlling for monetary policy could bias the estimations on the cyclical behavior of margins on the other hand credit risk is expected to be countercyclical and to raise margins so that default should help explain the countercyclicality of the latter based on these two observations our empirical methodology consists of two steps in a first step we test whether the negative and significant contemporaneous sample correlations between margins and a business cycle indicator are robust to the inclusion of controls related to monetary policy default risk and banking regulation results show it is so that there seems to be other channels through which fluctuations in the economy give rise to the observed countercyclicality of margins in a second step we look for these channels and offer several potential explanations for the observed behavior interest rate risk the economy s financial depth banks liquidity and capitalization and the share of total assets held by large banks all exert a significant impact on the behavior of margins over the business cycle these conclusions are consistent across alternative definitions of the margins and the business cycle indicator our work is linked to two strands of research in macroeconomics first our countercyclicality results are linked to the large literature on countercyclical markups in goods markets and its effects on aggregate demand started by rotemberg and saloner 1986 and rotemberg and woodford 1992 second price cost margins that vary endogenously and countercyclically in response to the state of the economy are a necessary condition for the existence of a financial accelerator as an amplifier of business fluctuations see for example bernanke and gertler 1989 and bernanke gertler and gilchrist 1998 therefore the countercyclical nature of price cost margins that we study here provides empirical support to the large body of literature in macroeconomic theory on this financial accelerator with price cost margins in the market for credit being countercyclical credit becomes more expensive in bad times firms may delay investment and production as a result and recessions may be exacerbated

does global liquidity drive commodity prices abstract this paper tackles the question of whether a cross sectional perspective on monetary policy is capable of explaining movements in global commodity prices in this vein we contribute to the rich literature on global liquidity in two different ways on the one hand to achieve a global series in terms of common monetary policy shocks we propose a distinction between common and idiosyncratic factors across economies as proposed by bai and ng 2004 our second innovation stems from the consideration of a markov switching vector error correction model when analyzing time varying short run dynamics having identified the long run structure which includes a proportional relationship between commodity prices and global liquidity in the first step our results indeed show that the impact of a global liquidity measure on different commodity prices is significant and varies over time one regime approximately accounts for times where commodity prices significantly adjust to disequilibria while the second regime is characterized by either a weak or no commodity price adjustment the fact that global liquidity also reacts to disequilibria in a specific regime demonstrates the two way causality between monetary policy and commodity prices