demand for money in open economies abstract the demand for real cash balances deduced from an underlying portfolio model of the financial market is shown to depend upon domestic variables and foreign monetary developments the model is estimated using quarterly postwar data for canada germany uk and us there is clear evidence that demand for money is affected not only by changes in domestic variables such as permanent income domestic interest rate and price expectations but also by fluctuations in exchange rate expectations and foreign interest rates the conclusion that domestic monetary policy is fairly ineffective and domestic financial markets are highly vulnerable to changes in foreign financial and monetary developments need to be modified in light of the results presented in this paper

money income prices and interest rates including data from the 1980s sharply weakens the postwar time series evidence indicating significant relationships between money however defined and nominal income or between money and either real income or prices separately focusing on data from 1970 onward destroys this evidence altogether evidence indicating cointegration of real income and real money balances with due allowance for the effect of interest rates also deteriorates when the sample extends through the 1980s a positive finding is that the spread between the commercial paper rate and the treasury bill rate consistently contains highly significant information about future movements in real income copyright 1992 by american economic association

an econometric study of co2 emissions energy consumption income and foreign trade in turkey abstract this study attempts to empirically examine the dynamic causal relationships between carbon emissions energy consumption income and foreign trade in the case of turkey using the time series data for the period 1960 2005 this research tests the interrelationship between the variables using the bounds testing to cointegration procedure the bounds test results indicate that there exist two forms of long run relationships between the variables in the case of first form of long run relationship carbon emissions are determined by energy consumption income and foreign trade in the case of second long run relationship income is determined by carbon emissions energy consumption and foreign trade an augmented form of granger causality analysis is conducted amongst the variables the long run relationship of co2 emissions energy consumption income and foreign trade equation is also checked for the parameter stability the empirical results suggest that income is the most significant variable in explaining the carbon emissions in turkey which is followed by energy consumption and foreign trade moreover there exists a stable carbon emissions function the results also provide important policy recommendations

modelling the relationship between energy intensity and gdp for european countries an historical perspective 1800 2000 abstract in this paper we discuss an original article by gales et al 2007 concerning the relationship between total energy intensity and gdp per capita in their chiefly descriptive analysis of four european countries sweden the netherlands italy and spain over the last two centuries no inverted u curve relationship was found between total energy intensity sum of traditional and modern energy sources and gdp per capita by contrast in addition to considering total energy intensity we also distinguish between modern energy intensity and traditional energy intensity further we integrate qualitative analysis with empirical analysis i e the ardl cointegration procedure in order to make our results more robust the main conclusions of gales et al 2007 are only partially confirmed considering total energy intensity can lead to erroneous conclusions in particular our estimates show a u shaped relationship between total energy intensity and gdp per capita in addition when we decompose total energy intensity two different relationships emerge a hyperbolic pattern traditional energy carriers and a u shaped inverse pattern modern energy carriers we conclude that the decreasing branch of the u shaped relationship between total energy intensity and gdp per capita is driven by traditional energy sources when the latter dominate modern energy sources low levels of gdp per capita in contrast the ascending branch of the u shaped relationship is driven by modern energy sources when prevailing over traditional sources high levels of gdp per capita

small states small problems income growth and volatility in small states abstract small states have attracted a large amount of research in this paper we test whether small states are any different from other states in terms of their income growth and volatility outcomes we find that controlling for location small states have higher per capita gdp than other states this income advantage is largely due to a productivity advantage constituting evidence against the idea that small states suffer from an inability to exploit increasing returns to scale small states also do not have different per capita growth rates than other states small states do have greater volatility of annual growth rates which is in part due to their greater volatility of terms of trade shocks this terms of trade based volatility is in turn due to small states greater openness their greater openness on balance has however a positive net payoff for growth the one differential policy measure that might be relevant for small states is to further open up to international capital markets in order to better diversify risk but the benefits of even that are still unresolved in the literature we conclude that small states are no different from large states and so should receive the same policy advice that large states do

economic reforms and long run money demand in china implications for monetary policy although money demand equations have been estimated for many western countries only recently have researchers investigated the demand for money in centrally planned economies like china chow 7 who helped pioneer the analysis of chinese macro data estimates a simple money demand function derived from the quantity theory using annual data from 1952 through 1983 he concludes that the quantity theory provides a reasonable first approximation in explaining the demand for money in china 7 325 portes and santorum 27 use real and nominal adjustment specifications and test for the homogeneity of money demand with respect to the price level and real income feltenstein and farhadian 11 estimate a money demand function based on cagan s 3 work and blejer et al 1 estimate an error correction model using data for only the 1980s both studies find that the demand for real balances is explained by real income and an opportunity cost measure

exchange rate sensitivity of the demand for money in spain 1998 exchange rate sensitivity of the demand for money in spain applied economics vol 30 no 5 pp 607 612

the role of natural gas consumption and trade in tunisia s output this paper examines the impact of natural gas consumption real gross fixed capital formation and trade on the real gdp in case of tunisia over the period of 1980 2010 we used auto regressive distributed lag ardl bounds testing approach to test the existence of long run relationship between the variables the vector error correction method vecm granger approach is applied to test the direction of causal relation between the series our findings indicate the existence of long run relationship among the variables natural gas consumption real gross fixed capital formation and trade add in economic growth natural gas consumption real gross fixed capital formation and real trade granger cause real gdp these findings open up new insights for policy makers to formulate a comprehensive energy policy to sustain economic growth for long run

residential electricity demand dynamics in turkey abstract this article provides fresh empirical evidences for the income and price elasticies of the residential energy demand both in the short run and long run for turkey over the period 1968 2005 using the bounds testing procedure to cointegration the computed elasticities of income and price are consistent with the previous studies and as expected the long run elasticities are greater than the short run elasticities an augmented form of granger causality analysis is implemented among residential electricity income price and urbanization in the long run causality runs interactively through the error correction term from income price and urbanization to residential energy but the short run causality tests are inconclusive the parameter stability of the short run as well as long run coefficients in the residential energy demand function are tested the results of these tests display a stable pattern

stability of the money demand function in asian developing countries previous studies that estimated the money demand function in asian developing countries either employed traditional estimation techniques or recently popularized cointegration technique while the first group suffers from spurious regression problems the second group interpreted their finding of cointegration as a sign of stability of estimated parameters this study after incorporating the cusum and cusumsq tests into cointegration analysis shows that in some asian countries even though real m1 or m2 monetary aggregates are cointegrated with their determinants the estimated parameters are unstable

the effectiveness of the public support policies for the european industry financing as a contribution to sustainable development in recent years the debate about the role of the public institutions in the fields of corporate social responsibility and sustainable development has gained momentum nevertheless the ambiguity of the latter concepts makes it difficult both to measure them and to estimate the impact that the different public initiatives may have on them in this sense the present research has the aim to design a fuzzy logic based methodology applied to the evaluation of the above mentioned processes in relation to the state aid policies for the european industry regarding the study contour the european union state aids seems not to have introduced important changes leading to socially responsible results and therefore favourable for the sustainable development generated by the european manufacturing industry

the implications of increasing globalization and regionalism for the economic growth of small island states abstract this paper provides an overview of the implications of globalization and increasing regionalism for small island states in the context of the critical determinants of their economic growth a brief outline of the globalization process is provided followed by a discussion of regionalism and the trend in subnational regional autonomy this is followed by an overview of the empirical literature on the critical factors determining the growth of small states next is an analysis of the implications for small island states of increasing globalization and regionalism in the context of the critical growth factors identified in the preceding section the paper concludes by proposing an agenda for further research into the implications for small island states of the impact of globalization on specific growth factors

the demand for m1 in the u s a 1960 1988 estimated u s m1 demand functions appear unstable regularly breaking down over 1960 1988 e g missing money great velocity decline m1 explosion we propose a money demand function whose arguments include inflation real income long term bond yield and risk t bill interest rates and learning curve weighted yields on newly introduced instruments in m1 and non transactions m2 the model is estimated in dynamic error correction form it is constant and with an equation standard error of 0 4 variance dominates most previous models estimating alternative specifications explains earlier breakdowns showing the model s distinctive features to be important in accounting for the data

stochastic trends and economic fluctuations are business cycles mainly the result of permanent shocks to productivity this paper uses a long run restriction implied by a large class of real business cycle models identifying permanent productivity shocks as shocks to the common stochastic trend in output consumption and investment to provide new evidence on this question econometric tests indicate that this common stochastic trend cointegration implication is consistent with postwar u s data however in systems with nominal variables the estimates of this common stochastic trend indicate that permanent productivity shocks typically explain less than half of the business cycle variability in output consumption and investment copyright 1991 by american economic association

factors influencing co2 emissions in china s power industry co integration analysis more than 40 of china s total co2 emissions originate from the power industry the realization of energy saving and emission reduction within china s power industry is therefore crucial in order to achieve co2 emissions reduction in this country this paper applies the autoregressive distributed lag ardl co integration model to study the major factors which have influenced co2 emissions within china s power industry from 1980 to 2010 results have shown that co2 emissions from china s power industry have been increasing rapidly from 1980 to 2010 the average annual growth rate was 8 5 and the average growth rate since 2002 has amounted to 10 5 secondly the equipment utilization hour as an indicator of the power demand has the greatest influence on co2 emissions within china s power industry in addition the impact of the industrial added value of the power sector on co2 emissions is also positive from a short term perspective thirdly the granger causality results imply that one of the important motivators behind china s technological progress within the power industry originates from the pressures created by a desire for co2 emissions reduction finally this paper provides policy recommendations for energy saving and emission reduction for china s power industry

australasian money demand stability application of structural break tests estimates of the demand for money provide important foundations for monetary policy setting but if the estimation technique does not explicitly account for structural changes then such estimates will be biased this paper presents an investigation into the level and stability of money demand m1 for australia and new zealand over the 1960 2009 period and demonstrates that both countries experienced regime shifts australia also experienced an intercept shift application of four time series methods provide consistent results with 1984 and 1998 break dates cusum and cusumsq stability tests reveal that m1 demand functions were unstable over the 1984 to 1998 period for both countries although tests for stability are not rejected thereafter

long run income and interest elasticities of money demand in the united states econometric techniques designed to accommodate nonstationary data are used to reexamine the stability of interest and income elasticities of money demand in the united states estimates based on postwar monthly data reveal a stable relationship between m1 velocity and various measures of interest rates that proxy the opportunity cost of holding money balances tests for the existence of cointegration and methods used to estimate the income and interest elasticities are based on procedures prescribed by soren johansen 1988 corresponding error correction estimates offer insight as to the dynamics of the process that maintains the equilibrium relation between velocity and interest rates copyright 1991 by mit press

why do firms train theory and evidence this paper offers a theory of training whereby workers do not pay for the general training they receive the superior information of the current employer regarding its employees abilities relative to other firms creates ex post monopsony power and encourages this employer to provide and pay for training even if these skills are general the model can lead to multiple equlibria in one equilibrium quits are endogenously high and as a result employers have limited monopsony power and provide little training while in another equilibrium quits are low and training is high using microdata on german apprentices we show that the predictions of our model receive some support from the data

small island developing states and their economic vulnerabilities abstract many small island developing states sids face special disadvantages associated with small size insularity remoteness and proneness to natural disasters these factors render the economies of these states very vulnerable to forces outside their control a condition which sometimes threatens their very economic viability the gdp or gnp per capita of these states often conceals this reality in this paper the major vulnerabilities faced by sids are discussed and when possible quantified in the form of an index an attempt is also made to construct a composite index of vulnerability

economic policies and demand for money evidence from canada this study identifies canadian fiscal and monetary policy regime changes that could influence the services of money it is argued that if these policy regime changes were not incorporated in the estimation of demand for real balances the resulting estimate would be biased and unstable using canadian monthly data for the january 1975 to june 2001 period the paper estimates a standard demand for money m1 function with and without these policy regime changes it was found the demand for money in canada is stable over the short and long run periods when these policy regime changes are incorporated and the estimated coefficients have correct signs

the equilibrium relationship among money income prices and interest rates evidence from a threshold cointegration test the long run equilibrium relationship among money income prices and interest rates in japan is investigated by the threshold cointegration test which allows for asymmetric adjustment introduced by enders and siklos 2001 the threshold cointegration approach provides clear evidence of the cointegration relationship characterized by asymmetric adjustment by allowing for asymmetric adjustment results are obtained showing the stability of the money demand function similar to lucas 1988 who pointed out that the money demand function is stable if unit income elasticity is imposed in particular the estimated results show that the adjustment process toward equilibrium is highly persistent above an appropriately estimated threshold whereas the adjustment process toward equilibrium quickly converges below it this finding indicates that deviations from equilibrium resulting from increases in money or decreases in income and prices are highly persistent

offshore pariahs small island economies tax havens and the re configuration of global finance the stock of wealth held offshore is estimated at us 6 trillion many small island economies sies host offshore finance centers and some sies are highly dependent upon offshore finance extreme examples have over 90 of government revenues derived from finance sector activities since 1998 a series of international initiatives have been launched to combat harmful tax practices money laundering and inadequate financial regulation these initiatives will transform the economies of many sies this paper explores the dependence of many sies upon offshore finance and the barriers to diversification arising from their smallness and unique political economies

empirical study on the environmental kuznets curve for co2 in france the role of nuclear energy this paper attempts to estimate the environmental kuznets curve ekc in the case of france by taking the role of nuclear energy in electricity production into account we adopt the autoregressive distributed lag ardl approach to cointegration as the estimation method additionally we examine the stability of the estimated models and investigate the granger causality relationships between the variables in the system the results from our estimation provide evidence supporting the ekc hypothesis and the estimated models are shown to be stable over the sample period the uni direction running from other variables to co2 emissions are confirmed from the casualty tests specifically the uni directional causality relationship running from nuclear energy to co2 emissions statistically provides evidence on the important role of nuclear energy in reducing co2 emissions

german monetary unification and the stability of the german m3 money demand function abstract this paper employs quarterly data from the whole of germany to test the stability of m3 demand for money the methodology is based on an application of the cusum and cusumsq in the context of error correction modeling and cointegration the results reveal some instability in m3 money demand function

stability of money demand function revisited in china as china s economic reforms have undergone significant structural changes after 1979 it has been rather difficult to formulate a stable money demand function over the period following that year while previous literature on the long run relationship of money demand in china shows the existence of stable money demand this article revisits the stability of the china money demand function over the period after 1979 to employ the unit root tests and the cointegration tests with structural break the empirical evidence demonstrates that economic and financial deregulation did affect the stability of demand for money in china over the period 1977 to 2002 moreover the estimated long run income and interest elasticity are respectively 1 01 1 11 and 0 14 0 08 using the real m1 m2 equation in addition real income and the interest rate are found to be weakly exogenous we overall do find structural breakpoints mainly in 1980 and 1993 and they look to match clearly with corresponding critical financia

revisiting the us money demand function an application of the lagrange multiplier structural break unit root test and the bounds test for a long run relationship in this article we examine the issue of a levels relationship and stability of the us money demand function over the period 1959 01 to 2004 02 we use the lagrange multiplier structural break unit root test and the bounds testing approach to a long run relationship in levels of the variables namely real money demand nominal interest rate and real income we find greater evidence for a long run relationship in levels and stability of the us money demand function when we use m2 as a proxy for money demand however we find little evidence for a long run relationship between m1 and m2 with their determinants for the recent period spanning the last decade or so

a comparison of the economic performance of different micro states and between micro states and larger countries the economic performance of micro states and those sub national regions enjoying a high degree of autonomy is a generally under researched area this paper builds on earlier research armstrong and read 1995 by employing quantitative techniques to test 1 a the extent to which the economic performance of micro states differs by comparing their gnp per capita with that of the region in which they are located and with the countries to which they are adjacent 2 b whether some micro states perform better than others as a result of differences in their economic structure and 3 c whether the rates of growth of micro states have been faster or slower than those of larger countries considerable diversity among micro states is revealed although most exhibit strong economic performance

the role of natural gas consumption in saudi arabia s output and its implication for trade and environmental quality abstract in this paper we examines the contribution of natural gas consumption in the real gdp of saudi arabia using long span and recent time series data over the period 1968 2016 in a multivariate framework which incorporates total trade as additional variable by using the autoregressive distributed lag method of cointegration we find long run a cointegration equilibrium relationship between ngc total trade and real gdp with a positive significant relationship among the variables by applying the toda and yamamoto method to granger causality testing we find a one sided causality running from ngc to real gdp while between real gdp and trade ngc and total trade total trade and real gdp are without a feedback from our empirical results we suggest that natural gas conservation policy would hurt the demand for natural gas hinder total trade and thus retard domestic output however in the near future it is possible for the saudi arabian government to meet energy needs and enhance total trade by adopting renewable energy alternatives to natural gas results however upon which the policy implications are inferred should be applied with caution as they may not be feasible enough to justify the adoption of unappealing energy policy choice for saudi arabia

sustainable development in pacific micro economies abstract this paper argues that the central economic problem for a number of very small pacific island economies is the preservation and enhancement of their status as rentier societies and the relatively high living standards vis a vis other developing countries which go with the status the thrust of most development planning in the region with its focus on sustainable expansion of productive activity is misdirected in these small countries it is not productive activity but rent entitlements which must be sustained and reproduced over time aid philately and migrant remittances are not merely supplements to local incomes they are the foundations of the modern economy insofar as conventional development projects crowd out aid and remittance entitlements their impact is immiserizing criticism is offered of a recent argument for returning to sustainable subsistence economies

the stability of long run money demand in five industrial countries abstract this study provides strong evidence for the stability of long run demand functions for narrowly defined money m1 in five industrial countries u s japan canada u k and west germany using post war quarterly data evidence of stability is examined using two different estimation techniques and through a formal test of parameter constancy designed specifically for cointegrating vectors in the majority of these countries the key to stability is the imposition of a unitary long run income elasticity that is rarely rejected by the data

testing for the stability of money demand in italy has the euro influenced the monetary transmission mechanism stability of money demand is a crucial issue for the efficacy of monetary policy this is particularly true in the presence of significant exogenous shocks to the monetary system by implementing the most recent econometric testing procedures this article intends to investigate the consistency of the stability of money demand in italy one of the larger european monetary union emu countries before and after the emu among others the objective is indeed to ascertain the effect of a change in the currency regime on the monetary aggregates and to provide a valid empirical model which is a viable tool for policy performance

do government subsidies stimulate training expenditure microeconometric evidence from plant level data this paper examines whether financial assistance provided by government induces firms to spend more of their own funds on training expenditures using plant level data for the republic of ireland we pay particular attention to the potential problems in such an evaluation study namely selectivity and endogeneity by first identifying a valid counterfactual for grant receiving plants via a matching estimator and then employing a difference in differences technique on this matched sample our results show that there are differences in causal effects between domestic and foreign owned plants for the former we find clear evidence that grant receipt stimulates private expenditure whereas there are no statistically significant effects for foreign owned plants based in ireland

cointegration tests of a long run relation between money demand and the effective exchange rate abstract for the period starting with the floating of the us dollar we find evidence that long run stationarity of the demand function for m2 but not m1 requires inclusion of the effective exchange rate these results lend some support to mckinnon s hypothesis that nonstationarity in the demand for money can be resolved by inclusion of the exchange rate jel f41 e41

co2 emissions energy consumption income and foreign trade a south african perspective abstract the effect of trade liberalisation on environmental conditions has yielded significant debate in the energy economics literature although research on the relationship between energy consumption emissions and economic growth is not new in south africa no study specifically addresses the role that south africa s foreign trade plays in this context a surprising fact given trade is one of the most important factors that can explain the environmental kuznets curve this study employs recent south african trade and energy data and modern econometric techniques to investigate this the main finding of interest in this paper is the existence of a long run relationship between environmental quality levels of per capita energy use and foreign trade in south africa as anticipated per capita energy use has a significant long run effect in raising the country s co 2 emission levels yet surprisingly higher levels of trade for the country act to reduce these emissions granger causality tests confirm the existence of a positive bidirectional relationship between per capita energy use and co 2 emissions whilst the study also finds positive bidirectional causality between trade and income per capita and between trade and per capita energy use it appears however that trade liberalisation in south africa has not contributed to a long run growth in pollution intensive activities nor higher emission levels

exchange rate sensitivity of demand for money and effectiveness of fiscal and monetary policies one of the arguments between proponents and opponents of floating exchange rates centres around the relative effectiveness of fiscal and monetary policy while proponents of floating rates argue that monetary policy is more effective under floating rates its opponents contend that fiscal policy is more effective under fixed rates however economic theory suggests that there is room for both policies under both types of exchange rate system depending upon degree of sterlization concentrating on the floating rates mundell 1963 has argued that the relative effectiveness of monetary and fiscal policies would also depend upon sensitivity of money demand to exchange rate more precisely he has conjectured that the demand for money is likely to depend upon the exchange rate in addition to the interest rate and the level of income this would slightly reduce the effectiveness of a given change in the quantity of money and slightly increase the effectiveness of fiscal policy on income and employment under

the demand for money in the united states evidence from cointegration tests this paper uses recent cointegration test procedures to investigate the underlying economic relationship between real money balances real income and interest rates for the united states unlike recent studies of money demand the authors analysis uses quarterly data spanning the period 1915 88 thus providing a sample encompassing a wide variety of economic experiences the evidence presented indicates that the broader m2 measure of money is the preferable measure with which to consider the long run effects of monetary policy copyright 1991 by ohio state university press

lessons on monetary policy from the 1980s t he half decade running from mid 1982 to mid 1987 was a pretty good era for u s monetary policy as these things go a sharp easing of policy beginning some time around midyear 1982 helped set in motion a recovery from the most severe business downturn the united states had experienced since the 1930s a downturn that tight monetary policy earlier on had deliberately brought about in order to slow the alarming acceleration of prices the recovery that ensued developed into a sustained expansion that continued without interruption through the end of 1987 thereby setting a new record for the longest recorded business expansion in u s peacetime experience a fiscal policy based on unprecedentedly large and continually growing structural budget deficits was a major factor underlying this record length expansion but at least monetary policy did not stand in the way just as importantly the severe 1981 82 recession served its intended purpose of substantially restoring price stability and even after five years of expansion inflation remained modest by recent historical standards at least as judged by these outcomes for the standard objectives of macroeconomic policy u s monetary policy was a distinct success during these years economists hoping to say something useful about monetary policy have had a tougher time the quantitative relationships connecting income and price movements to the growth of familiar monetary aggregates including especially the m1 measure of the money stock that had been the chief focus of monetary policy during 1979 82 utterly fell apart during this period moreover the collapse of these long standing

a paradigm shift to a new strategy for small island economies embracing demand side economics for value enhancement and long term economic stability abstract the article answers three interrelated questions pertaining to small island economies and tourism development under the condition of globalization 1 why is tourism relevant for small island economies 2 why is a supply perspective inappropriate for these economies and 3 why is a demand perspective more appropriate for small island economies in the era of globalization empirical realities indicate that small islands have performed well in specializing as tourist destinations despite their size constraints and resulting disadvantage in economic terms the caribbean region is an appropriate proxy for small island economies however globalization may be taking its toll on sectoral specialization in the caribbean as a development strategy the supply side strategy seems to have lost its effectiveness to reverse this trend the study proposes the implementation of new tourism strategies based on a demand focused approach to sustain value enhancement these strategies have important managerial and policy implications

human capital theory and uk vocational training policy since the industrial training act of 1964 the uk government has adopted a variety of policies intended to redress a problem of under investment in vocational training in the 1960s and 1970s it attempted to regulate the training provided by firms through a levy scheme more recently subsidised training schemes have been the centrepiece of policy this paper examines the explanations for market failure in vocational training and explores the rationale for such policies under investment can arise from credit constraints and uncertainty facing trainees and from imperfect competition in the labour market which creates external benefits for firms both subsidies and regulation can be effective in dealing with these problems although it is argued that the training levy scheme as implemented in the uk and other countries should be viewed mainly as a mechanism for releasing credit constraints copyright 1999 by oxford university press

inequality among world citizens 1820 1992 this paper investigates the distribution of well being among world citizens during the last two centuries the estimates show that inequality of world distribution of income worsened from the beginning of the 19th century to world war ii and after that seems to have stabilized or to have grown more slowly in the early 19th century most inequality was due to differences within countries later it was due to differences between countries inequality in longevity also increased during the 19th century but then was reversed in the second half of the 20th century perhaps mitigating the failure of income inequality to improve in the last decades jel d31 f0 n0 o0