natural resources national income and economic growth in africa abstract because standard measures of aggregate income such as gross domestic product gdp do not account for natural resource depletion their use as gauges of economic performance tends to exaggerate the benefits of resource extraction accounting for natural resource depletion in 18 african countries indicates different patterns of growth than those suggested by gdp figures use of the revised measures in analyses of the link between exports and growth suggests that export expansion may generate increases in measured gdp without stimulating increased production in contrast real exchange rate alignment is correlated with growth in both conventional gdp and the revised accounts

north american money surprises and financial market reactions an empirical note abstract in the late 1970s u s and canadian weekly money supply announcements occurred almost simultaneously the unanticipated components of these announcements are shown to be correlated and the importance of this factor for findings in the money surprise market response literature is explored

trade foreign direct investment and economic growth in asian economies despite the increasing role of foreign direct investment fdi in economic development very limited research has been carried out on the causal links between trade fdi and economic growth in asian economies this study examines empirically the inter play between exports imports fdi and economic growth for nine asian economies by conducting multivariate causality tests in the vector error correction model vecm framework the results reveal two way causal connections between trade inward fdi inward merger and acquisitions m as and growth for most of the sample economies there is a unidirectional causal link running from outward m as to growth and trade these findings suggest that export expansion import liberalization fdi inflows and inward m as are integral elements of the growth process in asian economies

the contribution of tourism development to economic growth in the korean economy abstract this study investigates the causal relations between tourism growth and economic expansion for the korean economy by using engle and granger two stage approach and a bivariate vector autoregression var model two principle results emerge from this study first the results of a cointegration test indicate that there is no long run equilibrium relation between two series second the outcomes of granger causality test imply the one way causal relationship of economic driven tourism growth the hypothesis of tourism led economic growth is not held in the korean economy this consequence is supported by testing the sensitivity of causality test under different lag selections along with the optimal lag

monetary policy regimes expected inflation and the response of interest rates to money announcements this paper examines the response of the term structure of interest rates to weekly money announcements estimated responses for both the pre and post october 1979 periods are first presented then two competing hypotheses involving the policy anticipations and expected inflation effects are formally specified and compared with the estimated responses both hypotheses are found to be consistent with the responses but they have sharply different implications about the federal reserve s short run monetary policy by exploiting these different implications additional empirical results focusing directly on the money stock process support the policy anticipations hypothesis

money supply announcements and interest rates another view in this paper i use a new approach to analyze the impact of money supply announcements on the bond market before 1980 the only available work on this subject consisted of a few unpublished papers by conrad 1978 sivesind 1978 and urich 1979 1 more recently published papers by grossman 1981 and urich and wachtel 1981 have appeared roley 1982 extends the grossman study to incorporate data after the federal reserve policy statement of october 6 1979 both grossman and urich and wachtel are primarily concerned with the question of money market efficiency using survey data made available by money market services of san francisco and data on treasury bill yields each finds that the market responds quickly to unanticipated changes in the money supply but that anticipated changes have no effect on interest rates in addition grossman finds that when he adds other variables such as past changes in the money

cliometrics and time series econometrics some theory and applications the paper discusses a range of modern time series methods that have become popular in the past 20 years and considers their usefulness for cliometrics research both in theory and via a range of applications issues such as spurious regression unit roots cointegration persistence causality structural time series methods including time varying parameter models are introduced as are the estimation and testing implications that they involve applications include a discussion of the timing and potential causes of the british industrial revolution income convergence and the long run behaviour of english real wages 1264 1913 finally some new and potentially useful developments are discussed including the mildly explosive processes graphical modelling and long memory

vector autoregression cointegration and causality testing for causes of the british industrial revolution the existence timing and possible causes of the british industrial revolution are considered by investigating the time series properties of industrial production and various explanatory variables utilising two types of robust cointegration based causality tests we argue that domestic forces notably technological progress shaped the industrial revolution whereas overseas trade expansion was mainly a consequence of industrial growth results from granger type var tests are contrasted with those of toda and phillips working paper 91 07 university of western australia 1991b where the latter manifest some of the potential problems raised by the authors when applied to a data set of this type an understanding of the possible causes of the first industrial revolution may shed more general light on the forces promoting industrialization and growth to the extent that the first industrial revolution offers a template exports appear not to provide a simple pathway to industrialization

exports and economic growth evidence from 19th century europe abstract cointegration and granger causality tests on data for six european countries from around the middle of the 19th century to 1913 show that exports and gnp were cointegrated and granger causally related with export led growth in italy norway and sweden

is the export led growth hypothesis valid for canada empirical evidence linking exports to economic growth has been mixed and inconclusive this study re examines the export led growth elg hypothesis for canada by testing for granger causality from exports to national output growth using vector error correction models vecm and the augmented vector autoregressive var methodology developed in toda and yamamoto 1995 application of recent developments in time series modelling and the inclusion of relevant variables omitted in previous studies help to clarify the contradictory results from prior studies on the canadian economy the empirical results suggest that a long run steady state exists among the model s six variables and that granger causal flow is unidirectional from real exports to real gdp jel classification f43 c32 est ce que l hypothese de la croissance engendree par les exportations est valide pour le canada les resultats empiriques des etudes tentant de montrer le lien entre les exportations et la croissance economique sont mixtes et ne contiennent pas de resultats concluants cet article re examine l hypothese dans le cas du canada en testant la causalitea la granger pour les exportations et la croissance du produit national en utilisant les modeles vecm et la methodologie var developpes par toda et yamamoto 1995 l application de certains developpements recents dans l analyse des series chronologiques et l inclusion de variables pertinentes omises dans les etudes anterieures aident a mettre de l ordre dans les resultats contradictoires des etudes anterieures portant sur l economie canadienne les resultats empiriques suggerent qu un regime permanent existe entre les six variables du modele et que la causalitea la granger est unidirectionnelle des exportations reelles vers le pib reel

why interest rates react to money announcements an explanation from the foreign exchange market abstract when the fed announces a money supply greater than had been expected interest rates rise why one explanation is that the market raises its estimate of the future rates of money growth and inflation and bids up nominal interest rates we offer contrary evidence on such days the dollar appreciates not depreciates an alternative explanation is that the market perceives the change in the money stock as a transitory fluctuation that the fed will reverse in the future the anticipated future tightening raises today s real interest rate causes a capital inflow and appreciates the dollar the result in fact observed

learning and the time interdependence of costa rican exports abstract exports may enhance learning through production induced learning by doing learning to export by doing and flows of information from customers we provide evidence on the learning effects of export destination for costa rica for 1955 through 1980 we examine granger causality results and export trends to determine relationships between exports to the central american common market cacm the rest of the south and the north increasing exports to the cacm appear to promote learning in machinery leather and intermediate manufactures we also find that the cacm redirects some exports away from northern markets probably with damaging consequences

on the export led growth hypothesis the econometric evidence from china the export led growth hypothesis is tested by estimating an augmented growth equation on the basis of times series data from china the granger no causality procedure developed by toda and yamamoto journal of econometrics 66 1995 was applied to test the causality link between exports and economic growth in a var system three distinct features in this paper stand out compared to earlier studies on china first we have gone beyond the traditional two variable relationship by building a var model in the production function context to avoid a possible specification bias second we follow riezman whiteman and summers empirical economics 21 1996 to test the export led growth hypothesis while controlling for the growth of imports to avoid producing a spurious causality result third we test the sensitivity of causality test results under different lag structures along with the choice of optimal lags in particular the methodology developed by toda and yamamoto 1995 is expected to improve the stan

export led growth and structural change evidence from malaysia many studies have tried to establish the causal link between export expansion and economic growth this contribution is to recognize that structural changes will change the sources of growth and this will affect the export growth relationship a country case study approach is used focusing on malaysia a country with one of the world s highest sustained growth rates and a long history of commodity trade we use var analysis of malaysian quarterly trade and gdp growth from 1965 to 1996 trade data are disaggregated into primary and manufactures exports and causality tests are applied to the entire period as well as two subperiods 150 the 1965 1501980 period when policy emphasis was on import substitution and the 1981 1501996 period when policies favoured export led growth statistical tests confirm export led growth for the full period and for the period to 1980 but tests on the 1981 1501996 period show growth causing exports primary exports had a stronger direct impact on economic growth than manufactu

the effect of unanticipated money on the money and foreign exchange markets abstract a number of studies have attempted to determine why unanticipated increases in the money supply are positively correlated with money market interest rates by examining the response of the foreign exchange market to unanticipated changes in the money stock they have found a significant positive relationship between unanticipated increases in the money supply and the foreign exchange value of the dollar and have interpreted this as evidence for the anticipated liquidity effect hypothesis however these results support this hypothesis only if both markets respond simultaneously to unanticipated changes in money this paper examines the cross market consistency of the response using six bilateral exchange rates and the treasury bill rate all measured over a narrow time interval the results show that in general these markets do not respond simultaneously to money announcements

exports and growth is the export led growth hypothesis valid for provincial economies this paper re examines the export led growth hypothesis using provincial data unlike other studies that concentrate on country level data this study investigates the validity of the hypothesis for four largest provinces in korea seoul kyunggee kyungnam and pusan the causal implication of the export led growth hypothesis is generally supported for all provinces in the sample the framework of analysis is two and four variable autoregressive models that include provincial exports provincial output terms of trade and national output shocks granger causal orderings from exports to output growth are generally supported in bivariate causal models in multivariate models variance decompositions and impulse response functions further indicate that export growth has a significant impact on output growth for all provinces although a feedback effect from output to export growth appears in seoul and the kyungnam province

a dynamic migration model with uncertainty we study a dynamic version of the harris todaro migration model where a finite population of infinitely lived bayesian agents choose consumption and migration decision rules as a function of their histories the agents do not know the production functions in the two sectors and learn about them through wage draws that they receive from the stochastic production functions the government knows the true production functions but is uninformed about the agents beliefs and the actual wage draws they observe the government maximizes its welfare function using wage subsidies in the two sectors and a migration tax we solve the agents dynamic programming problem and then use the solution to solve the government s dynamic programming problem we study the effects of government policies on the population distribution and illustrate the model by numerically solving a particular parametric example

exports investment efficiency and economic growth in ldc an empirical investigation this study seeks to analyse the relationship between exports and growth for 19 less developed countries it utilizes multivariate causality analysis based on the error correction model to address several important hypotheses the results indicate that when exports have a causal influence in the development process that in general this is the result of their effect on both efficiency and accumulation in addition improvements in output and capital accumulation in an economy seem to have just as much of an influence on exports as exports have on output and capital accumulation finally the growth process in east asia seems to be quite different from that in southeast asia

the response of short term interest rates to weekly money announcements each friday at 4 10 p m est the federal reserve announces its estimate of the narrowly defined money stock for the statement week ending nine days previously these money announcements have become one of the main events in financial markcts if for no other reason than the fact that significant movements in interest rates have been associated with large unanticipated changes in the money stock moreover since the late 1970s interest rate fluctuations in response to money stock announcements have dramatically increased over the 1l 2 hour intervals spanning the weekly announcements for example the variance of the change in the threemonth treasury bill yield in the three years since october 1979 is more than thirty times larger than that of the previous two year period l two factors may account for a large portion of the increased volatility of shortterm interest rates first on october 6 1979 the federal reserve adopted a reserve aggregate approach to monetary control replacing a procedure that emphasized stability of short term yields second despite the greater emphasis placed on monetary control the variance of weekly announced changes in the money stock has risen by about 70 percent since late 1979 in turn if greater volatility of announced changes makes future changes more difficult to predict the volatility of unanticipated weekly changes in money would have also increased 2 thus if financial markets are efficient and if weekly money announcements contain relevant information larger unanticipated changes in money may have caused larger fluctuations in interest rates

relationship between agricultural growth and farm imports in ldcs a sims causality test based on 35 countries abstract previous empirical studies on the relationship between agricultural growth and farm imports in the ldcs suffer from serious methodological defects which to some extent may invalidate their results and interpretations this study used sims causality test to examine interactions between agricultural output and agricultural imports for 35 ldcs individually it was found that there was no causality from agricultural output to agricultural imports for a majority of countries under study for countries where agricultural growth did have a causal effect on agricultural imports the effect was positive in some countries and negative in others

sovereign insolvency procedures a comparative look at selected proposals abstract the most practicable short term approaches for sovereign debt restructuring would include a code of conduct voluntary approach and collective action clauses contractual approach in the medium term a sovereign insolvency procedure statutory approach may have an important role to play because it would be a comprehensive instrument designed to coordinate different creditor groups prior to and during a debt crisis this paper provides a survey of six comprehensive policy proposals for a sovereign bankruptcy procedure it points to approaches that could improve existing proposals and creates a basis for new proposals which could prove conducive to reaching political consensus

causality between export growth and industrial development empirical evidence from the nics a comment abstract in a recent article chow 1987 argued that his empirical evidence supports the hypothesis that export growth causes industrial development in this comment i point out several serious shortcomings of chow s analysis

export instability and the domestic economy questions of causality the conventional view concerning the impact of export instability on the domestic economies of developing countries is one of pessimism export instability is thought to adversely affect the short run stability and longer run growth of income empirical evidence on these matters is however inconclusive this article applies a granger sims reduced form approach to examining whether export instability generates short run instability in domestic income for each of a sample of 20 trade dependent countries the results obtained strongly support the contention that export instability induces short run macroeconomic instability

tourism trade and growth the case of cyprus although the relationship between international trade and economic growth has found a wide application area in the literature over the years this can not be said about tourism and growth or trade and tourism this study employs the bounds test for cointegration and granger causality tests to investigate a long run equilibrium relationship between tourism trade and real income growth and the direction of causality among themselves for cyprus results reveal that tourism trade and real income growth are cointegrated thus a long run equilibrium relationship can be inferred between these three variables on the other hand granger causality test results suggest that real income growth stimulates growth in international trade both exports and imports and international tourist arrivals to the island furthermore growth in international trade both exports and imports also stimulates an increase in international tourist arrivals to cyprus and finally real import growth stimulate growth in real export

causal analyses between exports and economic growth in developing countries this study investigates the prima facie causal relationship between the exports and output growth in 30 developing countries over the period from 1960 to 1988 in a multivariate framework the information set considered for the output and exports models are domestic output exports labour and capital and exports domestic output exchange rate and foreign output respectively this study indentities a feedback prima facie causal relationship between exports and output growth in five countries export growth prima facie causes output growth in another six countries output growth prima facie causes export growth in a further eight countries and no causal relationship was observed between export growth and output growth in the remaining 11 countries we also found that in 15 countries the foreign exchange rate prima facie caused export growth and that in 12 countries world output caused export growth

is the export led growth hypothesis valid for australia the relationship between exports and output is examined using australian annual data over the period 1900 1993 cointegration and causality testing fails to detect the existence of a long run or short run relationship between the two variables these results are explained by restoring to the structural time series modelling approach which shows that while the output series exhibits cyclical variation the exports series does not have this property it is concluded that the export led growth hypothesis is not valid for australia

sovereign debt restructuring messy or messier ever since the mexican asian and russian crises of the mid 1990 s efforts have been underway to find means for more effective prevention and resolution of currency financial crises much has been done with respect to crisis prevention exchange rate flexibility is much greater than it was there is increased transparency and improved oversight of the financial system and greater attention is paid to unsustainable policy stances work continues to strengthen economies immunity to crises however no matter how much is done there will inevitably be a crisis or crises much has already been learned with respect to crisis resolution and the international financial community is better equipped to cope with crises than was the case earlier but as with prevention more can be done one item on the agenda which should contribute both to prevention and to resolution is dealing with unsustainable debt burdens of sovereign nations two of the hallmarks of most of the 1990 s crises were first the importance of private capital flows and their reversals in triggering the crises and in intensifying their severity and second the involvement of the financial systems in them the countries afflicted by these crises were ones that had succeeded in raising per capita incomes and rates of economic growth that success hinged in significant part on their having put in place economic policies that are conducive to economic growth including a predictable legal framework respect for property rights openness to the international economy and much more the fact that the policy framework was generally appropriate implied among other things that there were relatively high real returns to investment in these economies that is of course the main reason why private investors were interested in them at the same time capital inflows permitted more rapid development than would otherwise be possible these associations of high real returns growth and appropriate policy stances continue for these reasons there is typically a strong stake for emerging markets to maintain international creditworthiness and policymakers go to great lengths to maintain their international reputations and market standings an efficient private international capital market benefits both developing countries which are thereby able to invest more than domestic savings at high real rates of return and investors in high income countries who can realize higher real returns and greater portfolio diversification than they could achieve without these investment opportunities because countries are sovereign their high stakes in maintaining creditworthiness are crucial for attracting international capital flows this is because foreign creditors do not have the rights they do in domestic courts and hence must have other protections against default on the part of borrowers this is especially true for sovereign borrowers international lenders to private entities in emerging markets normally have the same protection as is afforded to domestic lenders for sovereign borrowing however the chief protection foreign creditors have is the losses that would accrue to the sovereign debtor both directly through the future reduction in access to international credit markets and through the effects on private economic activity of a sovereign default in the event of discussants guillermo calvo interamerican development bank and university of maryland morris goldstein institute for international economics michael mussa institute for international economics ann harrison university of california berkeley

exports imports and economic growth in south korea and japan a tale of two economies this article investigates the relationship between exports imports and economic growth for south korea and japan by constructing a vector autoregression var model causality is examined between real gross domestic product gdp real exports and real imports several principal results emerge from the empirical work first the three variables are cointegrated for both countries implying that a long run steady state exists second there is evidence of bidirectional causality between imports and economic growth for both countries finally japan seems to experience export led growth while gdp growth in south korea has a negative effect on export growth these contrasting findings could result from export goods in japan exhibiting greater nonprice competitive aspects although their success fails to trigger a virtuous circle since growth fails to lead to increased exports while for south korea output growth leads to a decrease in export growth suggesting a strong domestic market

the effect of the asian financial crisis on the relationships among open macroeconomic factors for asian countries this study investigates the effect of asian financial crisis on the relationships among exchange rate volatility export import and productivity for taiwan korea malaysia and indonesia cointegration tests show no change for the long run equilibrium relationship among these variables throughout the crisis granger causality finds that some exogeneity orderings alter from pre to post crisis periods for the countries considered impulse response functions irs for the pre crisis period demonstrate the primary importance of productivity then second importance of export for the post crisis period oscillatory paths around zero of the irs imply an ambiguous finding for the direction of effect and relative exogeneity among variables studied the variance decompositions in export for taiwan korea and malaysia and in productivity for malaysia and indonesia did not change from the pre crisis to the post crisis era however most of the rest of the forecast error variances in variables were decomposed in

the long run impact of foreign shocks to the austrian economy an analysis at a sectoral level this paper investigates the long run impact of foreign shocks on the austrian economy which is an example of a small open economy with a fixed echange rate regime the analysis is done in a multisectoral vector autoregression framework foreign shocks involve inovations in gnp of european oecd countries oil prices effective echange rate and interest rates sectoral responses appear to be very different in particular shocks to european oecd gnp have a high long run impact on sectoral output especially in export dependent sectors this supports the hypothesis of export led growth

the role of exports fdi and imports in development evidence from sub saharan african countries the disappointing economic performance of sub saharan african ssa economies in the late 1980s prompted reforms in foreign trade and foreign direct investment fdi in the early 1990s using the autoregressive distributed lag ardl approach and pedroni panel estimation procedures that allow for heterogeneity this study found that exports and fdi have a significant impact on economic growth granger type causality tests show the interrelatedness of exports fdi imports and income variables the results also provide evidence of a two stage causal chain of exports imports and income this article calls for more market oriented policy reforms in ssa countries

the validity of the elg hypothesis in the mena region cointegration and error correction model analysis the export led growth elg hypothesis is examined for nine middle east and north africa mena countries in three variable vector autoregressive and error correction models when considering total exports the results reject the elg hypothesis in almost all of these countries when only manufactured exports are examined no support is found for elg in countries with relatively low shares of manufactured exports in total merchandise exports but strong support in countries with relatively high shares these findings suggest that promoting exports may contribute to economic growth only after a certain threshold of manufactured exports has been reached

changing interest rate responses to money announcements 1977 1983 abstract this paper investigates when and how the response of interest rates to money announcements changed in recent years the response of both short and long rates rises in october 1979 but drops during 1981 during mid 1982 the response of long rates raises again but without a change in the response of short rates despite a number of ex post explanations for these shifts none of the major hypotheses of why interest rates respond to money announcements provides a complete ex ante explanation of these response shifts

unit roots and cointegration in estimating causality between exports and economic growth empirical evidence from the asean countries abstract this paper utilizes cointegration and error correction representation methodology in estimating the long run behavioral relationship between exports and economic growth in the asean countries

growth and exchange rate volatility a panel data analysis the aim of this article is to assess the role of real exchange rate rer volatility on long run economic growth for a set of 82 advanced and emerging economies using a panel data set ranging from 1970 to 2009 with an accurate measure for exchange rate volatility the results for the two step system generalized method of moments gmm panel growth models show that a more less volatile rer has a significant negative positive impact on economic growth the results are also robust for different model specifications

south korean and taiwanese development and the new institutional economics the publication of books by both alice amsden and robert wade provide an opportune moment to reflect on the study of east asian development after an initial surge of interest beginning in the 1970s the field has reached a plateau and scholars recently have cast a wide net in searching for ways to extend the field in assessing the state of the art regarding the economic development of the east asian newly industrialized countries nics this review will treat three themes first i will argue that the focus on states versus markets is becoming stale and that much of the scholarly interest lies in the politics behind the economics second i argue that political scientists have underexplored the historical origins of korean and taiwanese capitalism and that such attention promises to strengthen both theories and explanations of development third i argue that the international system has been more important in promoting development in east asia than accounts in the first wave have recognized the purpose of this review is to assess the field reveal

foreign growth and domestic performance in a small open economy abstract in this paper we develop a small open economy model of trade with endogenous growth induced by human capital accumulation to analyze the effects of foreign growth on the domestic growth performance stronger foreign growth has the potential to increase domestic growth through a change in the terms of trade for this to happen the domestic attitude toward saving as indicated by the intertemporal elasticity of substitution plays a crucial role for economies with sufficiently thrifty consumers changes in the terms of trade generate funds for domestic investment thereby generating enhanced long term growth if however domestic consumers are less prone to thriftiness foreign growth may lead to lower domestic output growth this result suggests that foreign growth is not necessarily a substitute for a weak domestic attitude toward saving

are survey forecasts of macroeconomic variables rational this article examines the rationality of forecasts of 11 macroeconomic variables among the nonstationary series only surveys of housing starts the unemployment rate and the trade balance are rational forecasts among the stationary series survey forecasts for only consumer prices and personal income are consistent with rational expectations lack of rationality in forecasts of durable goods industrial production leading indicators money supply and retail sales suggests that such forecasts do not fully exploit public information indeed survey forecasts for industrial production and retail sales can be improved significantly with past information copyright 1995 by university of chicago press

an empirical investigation of the causal relationship between openness and economic growth in china this study investigates the causal relationship between openness and economic growth in china the integration and cointegration properties of the data are analysed and the models of granger sims geweke and hsiao are used to identify a bi directional causal relationship between gnp and exports plus imports this bi directional causation is consistent with china s development strategy of protected export promotion

the economic case for international labour standards this paper explores the economic case for international labour standards granting workers rights of free association and collective bargaining confers both static and dynamic economic efficiencies static efficiencies refer to one time gains from improvements in economic practice dynamic efficiencies refer to gains from improvements to the growth path resulting from a shift away from a low road development path to a high road path these efficiencies raise wages employment and output in developing countries and they can also benefit workers in developed countries labour standards are an institutional mechanism for raising the quality of growth in both developing and developed countries in this sense they are a win win institution

the credit view financial announcements and interesr rate responses abstract proponents of the credit view have argued that aggregate commercial bank lending decisions have strong macro economic effects this view is in contrast to the monetarist view that it is sufficient to consider the liability side of the banking sector s balance sheet in analyzing the economic outlook in this paper we examine whether or not financial markets reacted to unexpected changes in aggregate commercial bank lending during much of the 1980s in contrast to the implications of the credit view no evidence of a significant reaction to such shocks is uncovered however there is evidence to suggest that unexpected commercial paper activity is important to financial markets but the sign of the association is the opposite of that predicted by the credit view

cointegration causality and export led growth in mexico 1895 1992 abstract cointegration and granger causality tests show that real exports and real gdp in mexico over 1895 1992 were cointegrated and there was a significant and positive granger causal relationship running from exports to economic growth

manufactured exports of developing countries and their terms of trade since 1965 abstract during the last 40 years since the prebisch singer terms of trade deterioration hypothesis was first proposed the commodity composition of exports of developing countries has undergone a major change in the direction of dominance of manufactures in their nonfuel exports with strong growth in the volume of their manufactured exports but this did not allow developing countries to escape unequal exchange relations with the industrial countries their barter terms of trade in manufactures showed signs of weakness rather than improvement and clearly failed to reflect the respective productivity trends leading to deterioration in factoral terms of trade

causality between exports and economic growth abstract this paper utilizes granger causality tests in investigating the relationship between exports and national income from a consistent data set for 47 developing countries in africa new empirical results as well as suggestions for future research are presented

market response to the weekly money supply announcements in the 1970s the hypothesis that the weekly announcement of the money supply affects interest rates is examined the announcement effect is interpreted as a policy anticipation effect that is an unanticipated increase in the money supply leads to an increase in interest rates in anticipation of future tightening by the federal reserve estimates of this effect with proxies for the unanticipated change constructed from a survey of money supply forecasts and an arima model indicate that a financial markets respond very quickly to the announcement and b the response was largest when policymakers emphasized the importance of the monetary aggregates financial market participants are careful observers of the weekly money supply announcement and generally agree that the announcement often leads to changes in interest rates this occurs because the announcement leads market participants to revise their expectations both of future federal reserve policy actions and of future economic conditions in this paper we examine the response of yields on treasury bills to the announcement of the money supply and the extent to which that response has varied in the last ten years money supply announcements may affect market interest rates in three ways first actual expansion of the money supply leads to lower interest rates through a liquidity effect however rapid monetary growth which is not anticipated leads market participants to expect the federal reserve to counteract such growth in the future as a consequence there may be a policy anticipation effect which causes higher interest rates in anticipation of future tightening furthermore prolonged rapid monetary growth also creates inflation and inflationary expectations which lead to higher interest rates thus there may exist a third effect the inflationary expectations effect which also leads to higher interest rates our interest in this paper is in the immediate market response to the weekly announcement of the money supply which as we argue below is most likely to be a policy anticipation effect the policy anticipation effect is best described by example suppose that the announced change in the money supply exceeds that which was expected by

re examining export led growth hypothesis a multivariate cointegration analysis for india this paper re examines the export led growth elg hypothesis using a vector autoregressive var model by considering the relationship between real gdp real exports and terms of trade for india during the period 1961 93 in re examining the elg hypothesis this study perhaps for the first time employs a multivariate framework using johansen s model selection and maximum likelihood cointegration procedure the results sugest that there is one long run equilibrium relationship among the three variables and the causal relationship flows from the growth in gdp and terms of trade to the growth in exports the causality from exports to gdp appears to be a short run phenomenon suggesting that the recent export promotion strategies adopted in india have the potential of bearing growth in the future

the narrow moving band the dutch disease and the competitive consequences of mrs thatcher notes on trade in the presence of dynamic scale economies abstract this paper presents a model of trade in which comparative advantage instead of being determined by underlying attributes of countries evolves over time through learning by doing in this model arbitrary patterns of specialization once established tend to become entrenched over time the model sheds light on three widely held views that do not make sense in more conventional models first is the view that temporary protection of selected sectors can permanently alter the pattern of comparative advantage in the protecting country s favor second is the view that seemingly favorable developments such as the discovery of exportable natural resources may lead to a permanent loss of other sectors and reduce welfare in the long run third is the possibility that a temporary overvaluation of a currency due to tight money can lead to a permanent loss of competitiveness in some sectors

policy regime changes and monetary expectations testing for super exogeneity abstract the super exogeneity status for weekly u s monetary expectations structure is examined the incomplete structure of the proposed model requires the use of an incidental parameter which is approximated by a linear function of certain instruments a super exogeneity test within the instrumental variables framework examines whether distributional changes stemming from the regime shifts affect the error correction parameter in the expectations structure under the assumption that the variance of the error correction term is constant the data evidence is found to reject super exogeneity

is there a social kuznets curve the influence of labour standards on inequality abstract this study empirically investigates the impact of core labour standards on income inequality for a range of 90 countries from 1990 2000 a synthetic index of labour standards is computed by means of a multiple correspondence analysis and no significant correlation is found with the gini index one of the reasons pointed out is that the effective implementation of core labour standards depends on the quality of the country s political and legal systems using instrumental variables in a tsls model we found an inverse u shaped curve between the new endogenous index of core labour standards and income inequality

causality between export growth and industrial development empirial evidence from the nics abstract this paper investigates the causal relationship between export growth and industrial development in eight newly industrializing countries nics results of sims causality test show that for most of the nics there is a strong bidirectional causality between the growth of exports and industrial development these findings support the export led growth strategy in that expansion in exports not only promote the growth of national income but also lead to structural transformation of the developing countries

the imf the world bank and commodity prices a case of shifting sands abstract this paper examines some recent developments in the thinking of both the international monetary fund and the world bank regarding the macroeconomic determinants of commodity prices and the relative importance of secular and cyclical factors in explaining their recent behavior

is there monopsony in the labor market evidence from a natural experiment recent theoretical and empirical advances have renewed interest in monopsonistic models of the labor market however there is little direct empirical support for these models we use an exogenous change in wages at department of veterans affairs va hospitals as a natural experiment to investigate the extent of monopsony in the nurse labor market we estimate that labor supply to individual hospitals is quite inelastic with short run elasticity around 0 1 we also find that non va hospitals responded to the va wage change by changing their own wages

exports growth and causality in ldcs abstract using akaike s optimal lag criterion in a granger causality test the causal relationship between export growth and economic growth and vice versa is re examined for 20 countries it is argued that earlier analyses which ignore optimal lags in granger or sims causality tests suffer from certain shortcomings which are overcome by the present approach the results suggest some support for the export promotion hypothesis especially in the case of well known nics and thus differ from previous applications of granger test which did not adopt an optimum lag criterion and which showed no causality from export growth to economic growth in such cases however they are inconclusive in evaluating competing hypotheses

exports export composition and growth cointegration and causality evidence for malaysia this paper comprehensively tests the export led growth elg hypothesis for malaysia for the period 1955 90 using cointegration and causality testing based on hsiao s synthesis of the granger test and akaike s minimum final prediction error criterion the results provide support for the elg hypothesis aggregate exports granger cause real gdp and non export gdp this relationship is found to be driven by manufactured exports rather than by traditional exports

export processing zones in the dominican republic transforming manufactures into commodities this paper examines the performance of export processing zones in the dominican republic it shows that in specializing in unskilled labor intensive export processing in the context of competitive devaluations between central american countries the dominican republic has experienced immiserizing employment growth in these circumstances the export of labor intensive manufactures is akin to that of primary commodities exporting countries which rely on unskilled labor and which fail to make the transition to higher value added production exports are thus likely to experience declining terms of trade the conclusions of this case study are considered to have wider relevance to world bank and international monetary fund inspired structural adjustment programs in the region

exports and economic growth in industrialized countries the prima facie causal relationships between growth exports and factor inputs capital and labour are investigated in five industrialized countries germany itlay japan united kingdom and united states over the period 1960 87 by analysing a four variable vector autoregressive var model for each country our results indicate that germany and japan experienced export led growth reverse causality between exports and growth is found in the case of the us and uk while to causal relationship between exports and output is found for itlay

intra nie competition in exports of manufactures this paper provides empirical evidence on the extent to which the asian newly industrialised economies nies compete in world export markets our results support existing studies which emphasise the importance of allowing for intra ldc competition in modelling an individual developing country s exports whilst the asian nies are regarded as a model for other developing countries to emulate one has to consider whether such an expansion in export supply would be at the expense of oecd economies or whether it will lead to a deterioration in the terms of trade of the developing countries as a group

could international labour rights play a role in us trade during its last complete business cycle from 2001 to 2007 the usa experienced unsustainably high trade deficits policymakers are considering a number of measures to avoid a recurrence of such large external imbalances one such measure is the promotion of better labour rights around the world proponents argue that higher labour standards would boost us exports by increasing income growth abroad and reduce us imports by shrinking international price differences opponents of such a policy move argue that it is disguised protectionism that will impede trade and harm living standards in the usa and abroad in this paper i combine us trade data with data on international labour standards and other relevant economic variables to study any links between labour rights abroad and us trade the results suggest that the usa would have benefited from more exports if there had been better worker rights around the world but that labour rights would not have had any measurable impact on us imports that is the promotion of better worker rights around the world could contribute to smaller external imbalances without impeding international trade flows

cointegration causality and export led growth in portugal 1865 1985 abstract this paper considers the relationship between cointegration and causality and uses tests of cointegration as pre tests for granger tests of causality such methods are utilized on portuguese data 1865 1985 where the export led growth hypothesis is rejected in favour of reverse causality

economic growth export and external debt causality the case of african countries empirical investigation of the export driven economic growth hypothesis has provided mixed results in a bivariate causality framework the problem with such bivariate causality analysis is that there can be an omitted variable which could adversely affect the results this paper looks at the trivariate causality analysis of african countries by introducing external deby servicing as a third variable in the export economic growth analysis the results indicate that there is a feedback or bidirectional causality between external debt servicing economic growth and exports evidence of the 1983 90 subperiod is consistent with the argument that the structural adjustment programmes which were designed to remove economic distortions promote exports and encourage external debt management increased growth in the countries involved

market potential and the rise of us productivity leadership abstract today s globalization driven by lower barriers to trade has increased market potential for many nations and led to gains in gdp per capita we test whether this was true in the first wave of globalization by constructing market potential measures for a sample of 27 countries in 1900 and 1910 based on a general equilibrium model of production and trade cross sectional estimates suggest that market potential was an economically significant determinant of gdp per capita at this time to assess welfare effects we then study the general equilibrium impact of raising market potential by eliminating international borders in a quantitative counterfactual calculation for 1900 there are significant gains in real income per capita for all nations we use us per capita output as a benchmark since it attained leadership in this variable from the late 19th century and the literature frequently attributes this to its relatively large domestic market a market unconstrained by trade costs associated with international borders because market potential was already near that of the us the largest european countries do not entirely close their per capita income gaps with the us after removing all border barriers to trade within europe or even globally on the other hand many small european countries could have done so

trade deficit announcements intervention and the dollar abstract the effect of u s trade deficit announcements on the dollar exchange rate from 1980 1988 is examined the announcement is found to affect the dollar only after mid 1984 central bank intervention does not appear to have had a consistent impact on the dollar on the day of the announcement

fostering labor rights in developing countries an investors approach to managing labor issues while private sector investment plays a key role in fostering sustainable economic development in developing countries respect for internationally recognized worker rights is also a vital component the paper presents a methodology to assist investors in large scale private infrastructure and other industry sector projects to utilize internationally recognized core labor rights and related standards for fostering sound labor management the methodology involves due diligence or analysis of labor conditions and subsequent supervision and monitoring of performance and promotes the use of best practices to complement existing minimum requirements case study examples are presented and challenges in applying the approach are discussed

agricultural exports and economic growth in less developed countries this article examines the contribution of agricultural exports to economic growth in less developed countries ldcs a sources of growth equation is developed from a dual economy model where agricultural and nonagricultural sectors are both divided into export and nonexport subsectors this is then estimated using panel data for 62 ldcs for 1974 1995 results provide evidence that there are significant structural differences in economic growth between low lower middle and upper income ldcs investment in the agricultural export subsector has a statistically identical impact on economic growth as investment in the nonagricultural export subsector the marginal productivities in nonexport subsectors are over 30 lower than those in respective export subsectors from a policy perspective the results suggest that export promotion policies should be balanced

export expansion and economic growth testing for cointegration and causality this paper develops a multivariate error correction model to test the causality between exports and growth in 15 asian countries 1967 91 the underlying series are tested as non stationary in levels but stationary in first differences the causal factors are cointegrated in five of these countries only causality test results indicate that export expansion causes growth in two third of these countries corrected for simultaneity between the causal factors a country with a large public sector higher level of economic development and which is less vulnerable to external economic shocks is more likely to reap the benefits of export promotion strategies the causal inferences are fairly stable over the sample period

the structure of expectations of the weekly money supply announcement abstract this paper examines the structure of expectations of the weekly money supply announcement in the late 1970s the data used are from a weekly telephone survey of money market participants the rationality and structure of expectations are explored with the data organized in three ways the mean response to each weekly survey the pooled sample of individual responses and time series of responses by each individual in the survey the effect of data aggregation on rationality tests is investigated the structure of the expectations data are also examined and it is found that both strong regressive influences and adaptive learning characterize the data

export and production growth evidence from three major wheat exporters of australia canada and the united states this article investigates the robustness of the relationship between export and production growth for three major wheat exporters australia canada and the united states from 1966 to 2000 combining production international trade and development theories a four variable production exports producer price and imports vector autoregressive moving average varma model is developed for each country the causality results show that the hypothesis of export led development is supported by these three major players in the international wheat trade though a bi directional causality is found for canada and the usa variance decomposition and impulse response functions are employed to further investigate the effects of macroeconomic shocks

non transboundary pollution and the efficiency of international environmental co operation abstract the standard view is that situations where no transborder environmental externalities occur are most efficiently dealt with by national environmental policies rather than by international co operation though this may be the general case non coordinated national policies do not always produce the most efficient international allocation this paper presents four cases in which the allocative outcome of non coordinated domestic policy choices can be improved upon by international environmental co operation the first case refers to the use of environmental policy as a strategic trade instrument the other cases refer to the existence of discrete technologies set up costs and increasing returns to scale the form of international environmental co operation should be adapted to the situation formal international agreements between countries are characterised by high transaction costs and may not always be the most efficient form of co operation

the information content of weekly money supply announcements this paper analyzes the information content of weekly money supply announcements and the use of this information in the market determination of interest rates a short term rational expectations model of the financial market is constructed which incorporates the reaction of the federal reserve to deviations from target money supply and provides a context for analyzing the impact of announcements in the model the federal reserve attempts to maintain target growth rates in the money supply by compensating for past deviations from target announcements which contain an unanticipated movement in the money supply lead the public to expect that the federal reserve will change the rate of growth in the short run to compensate the revision of expectations about future short term money supply leads the public to revise their expectations about short term interest rates the implications of the model are empirically tested using data from a survey of expected changes in the money supply and u s treasury bill data the results support the implications of the model that is weekly money supply announcements do contain new information for the market determination of interest rates and it is only the unanticipated component of the announcement which is important

exports and japanese economic development abstract the granger causality test used in this paper indicates that japanese growth in the prewar period was caused by the growth of the labor force and improvements in agricultural productivity in the postwar period growth in exports labor force and agricultural productivity caused output growth

the direct and relative effects of preferential market access abstract the proliferation of preferential trade agreements has resulted in a complex system of preferences in which market access conditions are often discriminatory in this paper we investigate how market access conditions have evolved between 2000 and 2009 and how this has affected international trade our results show that the proliferation of preferential access has increased bilateral trade not only due to lower tariffs but also because preferential access often resulted in higher preferential margins vis a vis foreign competitors the results also indicate that the evolution of the system of preferences has been disadvantageous for countries that did not actively engage in forming new trade agreements

the bounds test approach for cointegration and causality between financial development international trade and economic growth the case of cyprus this study employs the bounds test for co integration and granger causality tests to investigate the long run equilibrium relationship and the direction of causality between financial development international trade and real income growth for the cyprus economy the results of the study reveal that financial development as measured by broad money m2 international trade and real income growth are cointegrated thus a long run equilibrium relationship can be inferred among these three variables on the other hand granger causality test results suggest that in cyprus the growth in real income stimulates the growth of international trade both exports and imports and the growth of money supply furthermore growth in imports of goods and services also stimulates a growth in exports of goods and services of cyprus although this result contradicts our initial expectations it indicates the importance of capital inflows in cyprus that plays a major role in financing the investments mainly in the tourism

market reactions to u s weekly money supply announcements after the introduction of contemporaneous reserve requirements an empirical note abstract movements across the nominal term structure of u s interest rates have continued to be positively correlated with weekly money surprises post crr bond and foreign exchange market evidence suggests that these may no longer be movements in the real term structure