energy consumption and economic growth relationship evidence from panel data for low and middle income countries abstract this paper uses the panel data of energy consumption ec and economic growth gdp for 51 countries from 1971 to 2005 these countries are divided into three groups low income group lower middle income group and upper middle income group countries firstly a relationship between energy consumption and economic growth is investigated by employing pedroni 1999 panel cointegration method secondly panel causality test is applied to investigate the way of causality between the energy consumption and economic growth finally we test whether there is a strong or weak relationship between these variables by using pedroni 2001 method the empirical results of this study are as follows i energy consumption and gdp are cointegrated for all three income group countries ii the panel causality test results reveal that there is long run granger causality running from gdp to ec for low income countries and there is bidirectional causality between ec and gdp for middle income countries iii the estimated cointegration factor is not close to 1 in other words no strong relation is found between energy consumption and economic growth for all income groups considered in this study the findings of this study have important policy implications and it shows that this issue still deserves further attention in future research

when is external debt sustainable the article empirically examines the determinants of debt distress defined as periods in which countries resort to any of three forms of exceptional finance significant arrears on external debt paris club rescheduling and non concessional international monetary fund lending probit regressions show that three factors explain a substantial fraction of the cross country and time series variation in the incidence of debt distress the debt burden the quality of policies and institutions and shocks the relative importance of these factors varies with the level of development these results are robust to a variety of alternative specifications and the core specifications have substantial out of sample predictive power the quantitative implications of these results are examined for the lending strategies of official creditors

utility functions for public outputs and majority voting abstract this paper studies the existence and stability of majority voting equilibria over sequences of one dimensional choice problems in the public sector voters public sector preferences are derived from their primitive preferences over public outputs and private consumption by maximizing the latter out if agents ignore the potential effects of public sector states on private sector prices we find that majority voting equilibria will exist under the usual assumptions but these equilibria are not stable unless the primitive utility functions are separable and admit no wealth effects on demand for public goods if agents do take account of the effects of public sector states on private sector prices voting cycles may arise even when the choice space is one dimensional

co2 emissions energy consumption economic growth and financial development in gcc countries dynamic simultaneous equation models abstract this study investigates the dynamic causal relationships among carbon emissions financial development economic growth and energy consumption for gulf cooperation council gcc countries from 1980 through 2011 annual time series data and an autoregressive distributed lag ardl model are used the main contribution of this paper is that it has investigated the causes of carbon emissions by taking into account the role of financial development and economic growth in gcc countries the results suggest long run and causal relationships among carbon emissions financial development gross domestic product gdp and energy use in all gcc countries except united arab emirates uae moreover there is long run unidirectional causality running from carbon emissions to energy use in the case of saudi arabia uae and qatar furthermore a one way causal relationship from financial development to carbon emissions in the context of uae oman and kuwait is found the evidence suggests that financial systems should take into account environmental aspects in their current operations in these countries the results of this study may be of great importance for policy and decision makers in developing energy policies for gcc countries that contribute to curbing carbon emissions while preserving economic growth

some nonlinear tax effects on asset values and investment decisions under uncertainty abstract tax system nonlinearities are often ignored but with uncertainty may have important implications for the magnitude and direction of tax effects this paper studies a particular nonlinear tax rule the policy subsidizes asset values but may discourage some investments and encourage earlier shutdown of some projects the marginal effective tax rate varies with project risk furthermore a corporate cash flow tax can encourage investment due to interactions with the nonlinear policy the paper also presents a general statement of the stochastic equilibrium valuation method which can be used to analyze other nonlinear taxes numerical examples demonstrate computational feasibility

tourism as a long run economic growth factor the spanish case this paper examines the role of tourism in the spanish long run economic development the tourism led growth hypothesis is confirmed through cointegration and causality testing the results indicate that at least during the last three decades economic growth in spain has been sensible to persistent expansion of international tourism the increase of this activity has produced multiplier effects over time external competitivity has also been proved in the model to be a fundamental variable for spanish economic growth from the empirical analysis it can be inferred the positive effects on income that government policy in the adequacy of supply as well as in the promotion of tourist activity may bring about

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

adoption of an imf programme and debt rescheduling an empirical analysis the existence of an empirical relationship between the adoption of an imf programme and the concession of a debt rescheduling by commercial and official creditors is tested using a bivariate probit model if countries who have arrangements with the imf are more likely than others to obtain a rescheduling of their external debt we could conclude that the adoption of an imf programme could work as a sort of signal of a country s good willingness which is thus rewarded with the debt relief the results confirm the existence of a significant effect of the adoption of an imf programme on the subsequent concession of a debt rescheduling by creditors

the impacts of tourism energy consumption and political instability on economic growth in the mena countries using panel data of 24 countries in the middle east and north african mena region from 2001 to 2009 the purpose of this study is to examine the impacts of tourism energy consumption and political instability on economic growth within the neoclassical growth framework to address the objective of this study we utilise both the static panel data approach as well as the dynamic generalised method of moments gmm estimator to examine the impact of candidate variables our results show that energy consumption and tourism significantly contribute to the economic growth of countries in the mena region hence our study lends some support to the existence of the tourism led growth and energy led growth hypotheses in the region in line with our expectation our estimation results also reveal that political instability impedes the process of economic growth and development in the mena region therefore macroeconomic policies to promote expansion in tourism and energy consumption will directly stimulate economic growth additionally efforts to help the region overcome its history of political instability would attract more international tourist arrivals and further invigorate economic growth

political business cycles and inflation stabilization abstract this article analyzes the effects of the timing of elections on the timing and character of adopted inflation stabilization plans multinomial logit estimations show that before elections exchange rate based stabilizations are more likely to be implemented than money based stabilizations while the opposite is more likely after elections

is the energy led growth hypothesis valid new evidence from a sample of 85 countries abstract the energy growth literature contains a large number of discussions on the causal relationship between energy consumption and economic growth the central debate focuses on whether energy consumption contributes or not to economic growth since it has direct implications for the formulation of strategic policies nevertheless current studies cannot provide a conclusive suggestion due to mixed causality results this inconclusive evidence is potentially attributed to model specifications and the stage of economic development of the countries under investigation hence this study attempts to empirically re investigate the validity of the energy led growth hypothesis using a different model specification and different stages of economic development for 85 selected countries around the globe overall although the causality results are mixed among countries we do find a systematic pattern in particular granger causality models with three and four variables are more likely to support the hypothesis compared to their counterparts that contain only two variables in addition both developed and developing countries are more likely to support the energy led growth hypothesis compared to the less developed or low income countries therefore causality results are very sensitive to the choice of the model specification along with the stages of economic development finally energy conservation policies should only focus on low income countries as these policies may not retard the process of economic growth

revisiting the tourism led growth hypothesis for turkey using the bounds test and johansen approach for cointegration abstract this paper empirically revisits and investigates the tourism led growth tlg hypothesis in the case of turkey by employing the bounds test and johansen approach for cointegration using annual data from 1960 2006 although gunduz and hatemi j 2005 is the tourism led growth hypothesis valid for turkey applied economics letters 12 499 504 support the tlg hypothesis for turkey suggesting unidirectional causation from tourism to economic growth by making use of the leveraged bootstrap causality tests and ongan and demiroz 2005 the contribution of tourism to the long run turkish economic growth ekonomick casopis journal of economics 53 9 880 894 suggest bidirectional causality between international tourism and economic growth in turkey this study does not find any cointegration between international tourism and economic growth in turkey therefore unlike the findings of gunduz and hatemi j 2005 and ongan and demiroz 2005 this study rejects the tlg hypothesis for the turkish economy since no cointegration was found and error correction mechanisms plus causality tests cannot be run for further steps in the long term

does the type of political regime matter for trade and labor market policies this article uses cross country data to examine the link between a country s type of political regime and its degree of openness and labor market distortion the analysis indicates that more authoritarian regimes are associated with higher trade protection and greater labor market distortions this supports the view that political authoritarianism may be counterproductive to development in important respects

how stable is the tourism led growth hypothesis in malaysia evidence from disaggregated tourism markets abstract we contribute to the tourism growth literature by applying the newly developed combined cointegration test and the recursive granger causality test to re assess the stability of the tourism led growth hypothesis in malaysia with respect to 12 different tourism markets the cointegration test results suggest that economic growth of malaysia is cointegrated with all the 12 selected tourism markets however the recursive granger causality test shows that the tourism led growth hypothesis in malaysia is valid and stable with respect to tourist arrivals from only 8 out of the 12 tourism markets almost all of them are from developed countries hence not all international visitor arrivals could effectively drive the growth of the malaysian economy in light of this tourism marketing policies should focus more on those tourism markets that could significantly stimulate economic growth however there should not be total neglect of others as they potentially contribute to the economies of scale

energy needs for morocco 2030 as obtained from gdp energy and gdp energy intensity correlations abstract we present forecasts of the energy consumption of morocco towards 2030 two models have been developed and their results compared one based on the energy intensity ie and another one on a link with the country urbanization rate urb the ie model allowed to segment energy consumption in four posts while the urb model only in two posts for the sensitivity analysis to economic growth three future gdp evolution scenarios are proposed the retrospective correlations of both models are excellent but their future extrapolations finish in slightly different results through their correlation to electricity consumption peak power forecasts are also presented a forecast of the country energy intensity is commented as the average yearly increase of electricity should still be between 4 9 and 7 1 during 2020 2030 the electric equipment program continuation after 2020 must soon be clarified and avoid the former implementation delays as the white combustibles needs should yearly increase between 6 3 and 7 8 in 2020 2030 electrical equipment programs should also make provisions for the case of deployment of electric cars butane subsidies widen the gap with other fuels and must be removed very soon possible to reduce the growth of its consumption and energy intensity

real and monetary determinants of real exchange rate behavior theory and evidence from developing countries abstract this paper develops a dynamic model of real exchange rate rer behavior in developing countries a three goods economy exportables importables and non tradables is considered residents of this country hold domestic and foreign assets and there is a dual exchange rate regime there is a government that consumes importables and non tradables a distinction is made between equilibrium and disequilibrium movements of the rer the determinants of real exchange rate misalignment are studied with emphasis placed on the role of devaluations and balance of payments crises the implications of the model are tested using data for 12 developing countries the results obtained are generally favorable for the model the issue of rer stationarity is also analyzed

three approaches to predict the timing and quantity of ldc debt rescheduling the performance of three approaches to predict the timing and quantity of ldc debt rescheduling is examined the balance sheet approach the traditional macro approach and the structural approach results show that the balance sheet approach performs better

economic and political determinants of budget deficits in developing countries abstract the evidence from a large sample of developing countries tends to reject the empirical implications of optimizing models of the process of determination of fiscal deficits tax rates seigniorage and inflation the paper also presents some preliminary evidence that an important reason for the failure of the equilibrium approach to fiscal policy is that fiscal deficits are partly determined by political factors and that cross country differentials in budget deficits may depend on measures of political instability in particular as suggested by a number of recent theoretical approaches an increase in the degree of political instability appears to lead to greater budget deficits

what makes growth sustained abstract we identify structural breaks in economic growth in 140 countries and use these to define growth spells periods of high growth preceded by an upbreak and ending either with a downbreak or with the end of the sample growth spells tend to be shorter in african and latin american countries than elsewhere we find evidence that growth duration is positively related to the degree of equality of the income distribution democratic institutions export orientation with higher propensities to export manufactures greater openness to fdi and avoidance of exchange rate overvaluation favorable for duration and macroeconomic stability

a re examination of the relationship between electricity consumption and economic growth in malaysia abstract the purpose of this study is to re investigate the relationship between electricity consumption and economic growth in malaysia from 1972 1 to 2003 4 this study adopted the newly developed ecm based f test kanioura a turner p 2005 critical values for an f test for cointegration in the multivariate model applied economics 37 3 265 270 for cointegration to examine the presence of long run equilibrium relationship through the autoregressive distributed lag ardl model the empirical evidence suggests that electricity consumption and economic growth are not cointegrated in malaysia however the standard granger s test and mwald test suggest that electricity consumption and economic growth in malaysia granger causes each other this finding provides policymakers with a better understanding of electricity consumption and allows them to formulate electricity consumption policy to support the economic development and to enhance the productivity of capital labour and other factors of production for future economic growth in malaysia

the political economy of inflation and stabilization in developing countries the traditional literature on inflation in developing countries has focused on three main determinants of inflationary pressures a money creation b fiscal imbalances and c cost push elements while the first two factors have been emphasized by authors of a monetarist persuasion cost factors have played a crucial role in the structuralist theories developed during the 1950s and 1960s however more recent analyses on inflation and stabilization have shifted their attention away from traditional direct economic causes of inflation such as money creation toward political and institutional determinants of inflationary forces this new literature which has come to be known as the political economy approach to macroeconomic policy has built on some important insights of game theory and the theory of public choice trying to explain why some governments decide to run large fiscal deficits and to rely heavily on the inflation tax typically in answering these questions this recent strand of the literature has emphasized the role of political instability credibility reputation and political cycles 2 in spite of providing some important new insights into the determinants of inflation this new literature is subject to two limitations first until recently most of the contributions have been theoretical without providing empirical tests on their most important implications and second the emphasis has been almost exclusively on the industrialized countries ignoring the developing nations the purpose of this article is to discuss selectively some of the most important insights of this new literature on policy making from the developing countries perspective i will emphasize the policy implications of this approach to inflationary analysis and discuss some of the limited empirical results

income distribution political instability and investment abstract this paper successfully tests on a sample of 71 countries for the period 1960 85 the following hypotheses income inequality by fuelling social discontent increases sociopolitical instability the latter by creating uncertainty in the politico economic environment reduces investment as a consequence income inequality and investment are inversely related since investment is a primary engine of growth this paper identifies a channel for an inverse relationship between income inequality and growth we measure socio political instability with indices which capture the occurrence of more or less violent phenomena of political unrest and we test our hypotheses by estimating a two equation model in which the endogenous variables are investment and an index of socio political instability our results are robust to sensitivity analysis on the specification of the model and the measure of political instability and are unchanged when the model is estimated using robust regression techniques

energy consumption political regime and economic growth in sub saharan africa abstract in this paper we examine the relationship between energy consumption and economic growth and how democracy moderates this relationship using panel data of 16 sub saharan african ssa countries for the period 1971 2013 employing a panel vector autoregressive model pvar in a generalized method of moments gmm framework the findings support the feedback hypothesis for energy consumption and growth second the interaction variable energy consumption and democracy is positively and significantly related to economic growth supporting the view that democracy moderates the energy consumption and growth nexus further the results provide strong evidence of a uni directional relationship from trade openness to energy consumption additionally impulse responses and variance decompositions also confirm positive feedback relationships between energy consumption and economic growth energy prices and economic growth

does tourism effectively stimulate malaysia s economic growth abstract this study attempts to further verify the validity of the tourism led growth hypothesis in malaysia using a multivariate model derived from the solow growth theory it employs annual data from 1975 to 2011 we find that economic growth tourism and other determinants are cointegrated specifically tourism has a positive impact on malaysia s economic growth both in the short run and in the long run the granger causality test indicates that tourism granger causes economic growth all this provides the empirical support for the tourism led growth hypothesis in malaysia in light of this any policy initiative that promotes tourism could contribute to malaysia s economic growth

electricity consumption and economic growth nexus in portugal using cointegration and causality approaches the aim of this paper is to re examine the relationship between electricity consumption economic growth and employment in portugal using the cointegration and granger causality frameworks this study covers the sample period from 1971 to 2009 we examine the presence of a long run equilibrium relationship using the bounds testing approach to cointegration within the unrestricted error correction model uecm moreover we examine the direction of causality between electricity consumption economic growth and employment in portugal using the granger causality test within the vector error correction model vecm as a summary of the empirical findings we find that electricity consumption economic growth and employment in portugal are cointegrated and there is bi directional granger causality between the three variables in the long run with the exception of the granger causality between electricity consumption and economic growth the rest of the variables are also bi directional granger causality in the short run furthermore we find that there is unidirectional granger causality running from economic growth to electricity consumption but no evidence of reversal causality

adjustment policies in developing countries a reassessment this paper analyzes policy responses to external shocks of the 1973 76 and 1979 81 periods in developing economies grouped according to the level of industrialization and the policies applied it is shown that outward oriented economies relied largely on export promotion and import substitution to offset the balance of payments effects of external shocks in both periods inward oriented economies failed to apply such output increasing policies of adjustment rather they financed the balance of payments effects of external shocks by foreign loans in the 1974 76 period and had to take deflationary measures in 1979 81 when their increased indebtedness limited the possibilities for further borrowing the policies applied led to rates of economic growth substantially higher in outward oriented than in inward oriented economies with growth rates in 1983 averaging 5 percent in the first case and practically nil in the second

distributional implications of macroeconomic policy theory and applications to el salvador abstract this article offers a theoretical framework for designing macroeconomic strategy for el salvador that will both respect stabilization and structural adjustment needs and enhance social equity after outlining the largely negative distributional implications of the orthodox policies followed by el salvador in recent years we argue that stabilization and efficiency could actually be improved by increased equity and sketch out the elements of an alternative approach that would be distributionally sensitive and thereby help consolidate the peace

does financial development increase energy consumption the role of industrialization and urbanization in tunisia this paper assesses the relationship among energy consumption financial development economic growth industrialization and urbanization in tunisia from 1971 to 2008 the autoregressive distributed lag bounds testing approach to cointegration and granger causality tests is employed for the analysis the result confirms the existence of long run relationship among energy consumption economic growth financial development industrialization and urbanization in tunisia long run bidirectional causalities are found between financial development and energy consumption financial development and industrialization and industrialization and energy consumption hence sound and developed financial system that can attract investors boost the stock market and improve the efficiency of economic activities should be encouraged in the country nevertheless promoting industrialization and urbanization can never be left out from the process of development we add light to policy makers with the role of financial development industrialization and urbanization in the process of economic development

redistribution and non consumption smoothing in an open economy this paper presents a model where income distribution and redistributive fiscal policy interact to affect the budget deficit and the pattern of net borrowing of a country according to the standard representative agent paradigm a small open economy should smooth consumption by borrowing from lending to the rest of the world when its income increases declines over time the simple model of this paper delivers exactly the same predictions in the absence of income dispersion when income distribution is not degenerate however the same model gives rise to a surprising wealth of results in particular poor economies with high inequality may exhibit completely counter intuitive patterns of fiscal policy and external borrowing the country s production path declines over time because the more mobile agents leave the country to escape taxation yet the country might end up having a budget deficit and borrowing from abroad thereby reinforcing rather than smoothing the asymmetry in consumption between the two periods an important feature of this outcome is that it is backed by both the poor and the rich who gain from the fiscal system at the expense of the middle class

the implications of risk and irreversibility for the measurement of marginal effective tax rates on capital the implications of risk and irreversibility for the measurement of marginal effective tax rates on capital are examined it is shown that when capital is irreversible the marginal effective tax rate is an increasing function of systematic and unsystematic capital and income risk the tax system may thus distort investments in risky capital to a much greater extent than is implied by previous research that ignored irreversibilities marginal effective tax rate calculations based upon the canadian corporate tax system are provided

sectoral analysis of the causal relationship between electricity consumption and real output in pakistan this study uses the annual data from 1972 to 2010 to assess the causal relationship between electricity consumption and real output at the aggregate and sectoral levels in pakistan this study covers three main economic sectors in pakistan namely agricultural manufacturing and services sectors our cointegration results reveal that the variables are cointegrated at the aggregate and sectoral levels at the aggregate level we find that there is uni directional granger causality running from electricity consumption to real output in pakistan at the sectoral level we find that electricity consumption granger causes real output in the manufacturing and services sectors however there is no causal relationship between electricity consumption and real output in the agricultural sector the policy implication of these results is that electricity conservation policies in general would deteriorate the process of economic growth as well as the real output in the manufacturing and services sectors in pakistan nevertheless we suggest the pakistani government to implement the electricity conservation policies merely to the agricultural sector because such policies may have less or no adverse impact on its real output

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

a problem with euclidean preferences in spatial models of politics abstract euclidean public sector preferences can not be induced from a strictly quasiconcave primitive utility function and a linear constraint

labor market adjustment to political conflict changes in the labor market in el salvador during the 1980s abstract i use household survey data for the 1980s to examine changes in the labor market of el salvador the findings suggest that the labor market does adjust to conflict there have been significant effects of conflict on the regional distribution of employment on international migration on internal migration in the areas directly affected other indicators such as labor force participation and self employment rates show outcomes are lower in the areas that were affected by conflict but were lower even before the conflict began and for earnings the level of real hourly earnings has fallen substantially in all areas in the 1980s

assessing and managing external debt problems in nigeria abstract the paper addresses some of the major issues in external debt management from the point of view of a borrowing country it has been found that frequent occurrence of debt and debt servicing problems among less developed countries ldcs can be traced to poor debt management despite the awareness of the need to develop an effective debt management capability and formulate specific debt management policies formal debt models have yet to enjoy wide application in many african countries whereas there are many debt management systems which debtor countries can adopt most african countries are not using them because of several constraints an analytical framework which can be used to formulate sound debt management policies is proposed and applied using nigeria as a case study

energy consumption and economic growth revisited in african countries abstract the aim of this paper is to provide new empirical evidence on the relationship between energy consumption and economic growth for 21 african countries over the period from 1970 to 2006 using recently developed panel cointegration and causality tests the countries are divided into two groups net energy importers and net energy exporters it is found that there exists a long run equilibrium relationship between energy consumption real gdp prices labor and capital for each group of countries as well as for the whole set of countries this result is robust to possible cross country dependence and still holds when allowing for multiple endogenous structural breaks which can differ among countries furthermore we find that decreasing energy consumption decreases growth and vice versa and that increasing energy consumption increases growth and vice versa and that this applies for both energy exporters and importers finally there is a marked difference in the cointegration relationship when country groups are considered

why are stabilizations delayed when a stabilization has significant distributional implications e g tax increases to eliminate a large budget deficit socioeconomic groups may attempt to shift the burden of stabilization onto other groups the process leading to stabilization becomes a war of attrition each group attempting to wait the others out and stabilization occurring only when one group concedes and bears a disproportionate share of the burden the authors solve for the expected time of stabilization in a model of rational delay and relate it to several political and economic variables they motivate this approach and its results by comparison to historical and current episodes copyright 1991 by american economic association

social polarization industrialization and fiscal instability theory and evidence this paper is motivated by an important puzzle that arises from the contrasting macroeconomic experience across developing regions in the recent decades in sharp contrast to east asia the fiscal policies in much of latin america and sub saharan africa are characterized by large fiscal deficits and volatilities of fiscal outcomes in order to address both large deficits and volatile fiscal outcomes we develop a simple model of endogenous fiscal policy in which government spending is strategically determined by heterogeneous policymakers in a dynamic game in an economy that is highly polarized due to unequal income distribution a larger fiscal deficit results and the intertemporal fiscal policy path becomes more volatile it is because the polarization of preference leads a policymaker representing each sector to spend more for her favorite sector collectively contributing to large deficits this polarization effect implies that a shock to tax revenue is translated into a more than proportional change in spending econometric evidence provides support for these predictions countries that have suffered from the greatest fiscal instability are those with highly polarized economic societies as measured by indicators of income inequality

external shocks politics and private investment some theory and empirical evidence abstract the manner in which the political system responds to external economic shocks in developing countries is a key determinant of the private investment response we look at a simple model of political economic equilibrium to make this intuition more precise and developed the idea of a political transmission mechanism even in the confines of this simple model we find that ambiguities abound domestic politics can magnify or dampen the effect of the external shock in our empirical work we find that a high level of urbanization magnifies the investment reduction in response to an external shock this is consistent with the supposition that high levels of urbanization are conductive to distributive politics with pernicious economic effects we also find that the provision of political rights is conductive to superior private investment behavior

applied econometrics and implications for energy economics research abstract developments in applied econometrics particularly with regard to unit root tests and cointegration tests have motivated a rich empirical literature on energy economics over the last decade this study reviews recent developments in time series econometrics applications in the energy economics literature we first consider the literature on the integration properties of energy variables we begin with a discussion of the implications of whether energy variables contain a unit root and proceed to examine how results differ according to the specific unit root or stationarity test employed we then proceed to examine recent developments in the literature on cointegration granger causality and long run estimates between disaggregated energy consumption and economic growth we review both single country and panel studies and pay particular attention to studies which have expanded the literature through adding variables such as financial development and trade in addition to energy consumption to the augmented production function as well as studies which have extended the literature through examining disaggregated energy consumption by type in each case we highlight best practice in the literature point to limitations in the literature including econometric modeling challenges and suggest recommendations for future research a key message of our survey is that the profession needs to guard against overload of research in these areas as most applied studies are no longer adding anything more to what is already known

a note on the causal relationship between energy and gdp in taiwan abstract this paper re examines the causality between energy consumption and gdp by using updated taiwan data for the period 1954 1997 as a secondary contribution we investigate the causal relationship between gdp and the aggregate as well as several disaggregate categories of energy consumption including coal oil natural gas and electricity applying granger s technique we find bidirectional causality between total energy consumption and gdp we find further that different directions of cause exist between gdp and various kinds of energy consumption

shifting mne taxation from national to global profits a radical reform long overdue the current separate accounting taxation of corporations gives governments the right to tax the national incomes of firms operating within their borders however multinational and increasingly digital business models beg the question what is national taxable income we argue that a radical rethink of the corporate taxation moving away from a separate taxation of national corporate income to a taxation of global corporate income allocated via formula apportionment is long overdue global corporate income as a basis for taxation is supported both by recent theoretical developments and corroborating empirical evidence with the eu and emerging economies including china already considering its adoption nor is it new as we relate formula apportionment of global corporate income was used a century ago before commercial and political interests promoted separate accounting thereby providing both precedent and experience to inform its re adoption

polarization politics and property rights links between inequality and growth most efforts to trace the effects of income inequality on growth have focused on redistribution however empirical investigation has not substantiated either the positive association of income inequality with redistribution or the negative association of redistribution with economic growth the authors analyze the effects of inequality in the broader context of social polarization they argue that social polarization whether rooted in income inequality or in ethnic tension makes large changes in current policies including those guaranteeing the security of contract and property rights more likely under a wide range of institutional arrangements the resulting uncertainties in the policy and contractual environment hinder growth they find strong empirical support for both parts of this argument the policy implications of their argument are quite distinct from those of arguments that inequality reduces growth by increasing pressures for redistribution if redistributive policies per se were to blame for the low growth resulting from inequality governments that seek to mitigate income inequality must inevitably confront a tradeoff between equity and growth if on the other hand the insecurity of property rights slows growth in unequal or otherwise polarized societies governments that commit over the long run to particular redistributive policies incur less risk of slowing economic growth fiscal redistribution that reduces inequality may actually increase growth by reducing the risks of political uncertainty

monetary policy delegation and polarisation there is by now a comprehensive literature beginning with rogoff 1985 arguing that a government should delegate monetary policy to a central banker who is independent and more conservative than the government itself this will reduce the inflationary bias typically at the cost of stabilisation for a democratic society this result would suggest that the median voter should prefer that monetary policy is delegated to an independent central banker who is more conservative than herself typically the central banker is chosen by the government and the government is chosen by the electorate thus there is some albeit perhaps a weak link between the preferences of the electorate and the central banker although the central banker presumably should be chosen for a long period of time waller and walsh 1996 he has to be chosen at some point in time this paper contains a political economy model where the central issue in politics is the choice of central banker and

energy economic growth and causality in developing countries a case study of tanzania and nigeria the debate about the precise role of energy in economic development remains contentious existing empirical studies have produced varying results some have argued the complementarity between energy and other factors of production and others have indicated that energy can be substituted for other factors of production commonly these studies have focused primarily on the developed countries one explanation being that supply constraints and price rigidities render any study on factor substitutions in developing countries meaningless however the functional relationship between energy consumption and income in developing countries is constantly investigated with the use of regression techniques while such techniques are useful in empirical analysis no mechanism exists for indicating causal directions between variables this limits the scope for policy analysis and prescription the need to identify causal direction between energy consumption and income growth in developing countries is overwhelming apart from providing further insights into the role of energy in economic development it provides policy analysts with a clearer understanding of the likely impact of energy supply constraints on economic growth this article examines the causal directions between energy consumption and economic growth proxied by gdp and gnp for nigeria and tanzania the results show a simultaneous causal relationship between energy and economic growth for both countries the implication being that unless energy supply constraints are eased economic growth and development will remain elusive to these countries given similar economic characteristics and profiling the same energy scenario for other developing countries our finding supports the view that energy plays a key role in economic development

review of energy growth nexus a panel analysis for ten eurasian oil exporting countries abstract the paper examines the energy growth nexus in ten oil exporting developing eurasian countries azerbaijan bahrain iran kazakhstan kuwait oman qatar russia saudi arabia and the uae over the period 1997 2014 lack of enough energy growth nexus studies on the oil exporters of the middle east and commonwealth of independent states coupled with a number of issues which have not been addressed by prior studies motivate us to conduct this review policymakers should take into consideration that any policy measures aimed at conserving the primary energy consumption can undermine economic growth as we find that the growth hypothesis dominates in the primary energy consumption growth nexus conversely validity of the neutrality hypothesis in the residential electricity consumption growth nexus another finding of this study implies that policymakers can pursue conservation policy by reconsidering the residential electricity subsidies in the selected countries the study contributes to the energy growth literature by addressing some issues and filling the gap for the eurasian oil exporting countries especially those in the middle east and commonwealth of independent states

energy consumption and economic growth nexus in portugal italy greece spain and turkey an ardl bounds test approach 1965 2009 abstract the paper examines the nexus between primary energy consumption and growth in portugal italy greece spain and turkey pigst with annual time series data from 1965 to 2009 pigst are southern european economies which have experienced several episodes that make them of particular interest to the study of periods of economic expansion and stagnation an ardl bounds test approach is a suitable technique to examine energy growth nexus within the context of countries with both sporadic shocks outliers and permanent shocks structural breaks empirical results suggest bidirectional causality between energy and growth in both the long run and short run supporting the feedback hypothesis the results reveal themselves to be robust to panel framework an energy conservation policy will reduce gdp growth while a saving phenomenon is observed since one additional unit of product requires less than one unit of energy

the political economy of sovereign defaults abstract how do income distribution and the tax system affect sovereign borrowing and default decisions are these effects shaped by the political constraints that governments face when raising revenues to repay the debt to address these questions we incorporate agent heterogeneity in terms of income distribution and tax burden and a political support constraint into a standard dsge model of sovereign default the results show that income inequality and regressive taxes make defaults more likely for a given level of debt while they reduce sovereign borrowing in equilibrium tighter political support requirements reinforce these effects

public opinion and market reforms the limits of economic voting the broadly held view that promarket reforms are good for most people is in conflict with the equally broadly held view that in democracies reforms will generate widespread resistance resistance is expected because reforms typically produce economic downturns at least over the short term under normal circumstances we expect citizens to withdraw support from governments during periods of economic decline if citizens withdraw support then governments worried about the next election may abandon reforms but our expectations should be different of new democracies pursuing promarket reforms citizens may believe governments when they claim that things have to get worse before they get better or that economic stagnation is the fault of the past model research in poland peru and mexico reported in this special issue supports these expectations hence under democracy there is more scope for support of painful reforms than frequently acknowledged

causal relationship between energy consumption and gdp growth revisited a dynamic panel data approach abstract this paper uses the panel data of energy consumption and gdp for 82 countries from 1972 to 2002 based on the income levels defined by the world bank the data are divided into four categories low income group lower middle income group upper middle income group and high income group we employ the gmm sys approach for the estimation of the panel var model in each of the four groups afterwards the causal relationship between energy consumption and economic growth is tested and ascertained we discover a in the low income group there exists no causal relationship between energy consumption and economic growth b in the middle income groups lower and upper middle income groups economic growth leads energy consumption positively c in the high income group countries economic growth leads energy consumption negatively after further in depth analysis of energy related data the results indicate that in the high income group there is a great environmental improvement as a result of more efficient energy use and reduction in the release of co2 however in the upper middle income group countries after the energy crisis the energy efficiency declines and the release of co2 rises since there is no evidence indicating that energy consumption leads economic growth in any of the four income groups a stronger energy conservation policy should be pursued in all countries

cointegration and causality between electricity consumption and gdp empirical evidence from malawi abstract the granger causality gc and error correction ecm techniques were applied on 1970 1999 data for malawi to examine cointegration and causality between electricity consumption kwh and respectively overall gdp agricultural gdp agdp and non agricultural gdp ngdp cointegration was established between kwh and respectively gdp and ngdp but not with agdp the gc results detect bi directional causality between kwh and gdp suggesting that kwh and gdp are jointly determined but one way causality running from ngdp to kwh the ecm results detect causality running one way from gdp also from ngdp to kwh suggesting that a permanent rise in gdp may cause a permanent growth in electricity consumption

re investigating the electricity consumption and economic growth nexus in portugal in the previous decades a number of studies have been conducted to analyse the causal relationship between electricity consumption and economic growth in the portuguese economy however the evidence remains controversial because the previous studies do not provide clear causality evidence this might be attributed to the omitted variables bias because most previous studies only focus on the relationship between electricity consumption and economic growth in a bi variate model this paper attempts to re investigate the relationship between electricity consumption and economic growth in portugal using a multivariate model based on the bounds testing approach to cointegration and the granger causality test within the vector error correction model vecm our empirical results confirm the presence of cointegration among the variables moreover there is evidence of bi directional causality between electricity consumption and economic growth in the short and long run this suggests that energy is an important source of economic growth in portugal therefore energy conservation policies should not be implemented because it would deteriorate the process of economic growth and development of the portuguese economy

structural adjustment policies in developing economies this paper examines structural adjustment policies in ldcs defined as policy responses to external or internal shocks that are carried out with the objective of regaining the pre shock growth path the introductory section of the paper reports on policy experience that indicates that countries applying an outward oriented development strategy were better able to cope with external shocks than economies following an inward oriented strategy it is further shown that the adoption of realistic exchange rates and interest rates the avoidance of large budget deficits and the productive use of the proceeds of foreign borrowing eased the process of adjustment the paper examines in detail the elements of a policy package that may be applied in response to external or internal shocks in the case prevalent in developing economies when optimal policies are not applied thus the recommendations simultaneously aim at responding to shocks and undertaking incentives incentives to save and to invest the choice of public investments sectoral policies in energy and agriculture budgetary policies and monetary policies in the conclusions the interdependence of the various policy measures is indicated with further attention given to foreign borrowing

debt arrears in latin america do political variables matter political instability and debt problems characterise latin america in the last two decades this article estimated a logit model of debt arrears including economic as well as political variables our results suggested that both economic and political indicators affected debt repayment in latin america during 1971 86 we also cast a shadow on the viewpoint that authoritarian and military regimes have an advantage over democratically elected governments with regard to debt related issues

uncertainty and the geography of the great recession we document the link between increased levels of economic and policy uncertainty and unemployment at the state level during the 2007 2009 recession the cross sectional variation in uncertainty robustly matches the distribution of employment outcomes during this period when we instrument for this cross sectional variation using preexisting institutions we find evidence for a causal role for uncertainty in increasing unemployment a simple model of hiring and firing under uncertainty rationalizes these results and the within state distribution of effects across industries occupations and individuals is consistent with this model s predictions together these results suggest that increased uncertainty contributed to the severity of the great recession

external and budget deficits in some developing countries abstract this paper documents and explains the positive comovement between the external and budget deficits of developing countries for which post 1960 time series data are available first the estimates indicate that the empirical covariance between these deficits is always positive and is statistically significant for many cases second the empirical covariance is close to that predicted from a tractable small open economy overlapping generation model with heterogeneous goods capturing the joint behavior of the external and budget deficits also the predicted covariance is induced by shocks which are closely related to internal conditions such as domestic resources and fiscal policies and to a much lesser extent to external conditions such as the world interest rate real exchange rate and terms of trade

the debt crisis structural explanations of country performance abstract this paper develops a cross country statistical model of debt rescheduling and the secondary market valuation of ldc debt which links these variables to key structural characteristics of developing countries such as the trade regime the degree of income inequality and the share of agriculture in gnp our most striking finding is that higher income inequality is a significant predictor of a higher probability of debt rescheduling in a cross section of middle income countries we attribute this correlation to various difficulties of political management in economies with extreme inequality we also find that outward orientation of the trade regime is a significant predictor of a reduced probability of debt rescheduling

adverse selection investment and profit taxation abstract this article introduces government revenue requirements and attendant taxation into a financial market model with informed borrowers entrepreneurs and uninformed lenders it finds that 1 in general an allocationally neutral proportional profit tax yields an equilibrium which is constrained inefficient despite the constrained efficiency of the no tax equilibrium 2 many constrained efficient allocations can only be supported by a profit tax regime which depends on the entrepreneur s investment choice and thus which is tantamount to direct intervention in the financial market and 3 some first best allocations can be supported by an investment invariant tax regime which includes a proportional profit tax and a positive fixed transfer

the political economy of growth a critical survey of the recent literature this article reviews the recent literature on the political economy of growth focusing on the research that has developed at the intersection of the endogenous growth literature and the new political economy it explores the relationship among four key variables economic growth and capital accumulation political instability political freedom and democratic institutions and income inequality

energy consumption and growth in south america evidence from a panel error correction model abstract this study examines the relationship between energy consumption and economic growth for a panel of nine south american countries over the period 1980 2005 within a multivariate framework given the relatively short span of the time series data a panel cointegration and error correction model is employed to infer the causal relationship pedroni s heterogeneous panel cointegration test reveals a long run equilibrium relationship between real gdp energy consumption the labor force and real gross fixed capital formation with the respective coefficients positive and statistically significant the granger causality results indicate both short run and long run causality from energy consumption to economic growth which supports the growth hypothesis

measuring the efficiency cost of wage taxation with uncertain labor productivity abstract estimates of the marginal efficiency cost of wage taxation can vary between 7 and 21 of revenues raised using a consistent definition eliminates much of the variability in these estimates however all studies carried out evaluate the marginal efficiency cost within a certainty framework the inclusion of uncertain labor productivity dramatically changes the efficiency loss measurement by affecting the marginal utility of lump sum income and consequently altering the marginal efficiency cost of a tax change

local versus international crises and bank stability does bank foreign expansion make a difference abstractwe investigate the impact of global and local crises on bank stability in the mena region and examine the effect of owning bank subsidiaries in other countries we consider banks that experienced both types of crises during our sample period our findings highlight a negative impact of the global financial crisis of 2007 2008 on bank stability but on the whole no negative impact of the local crisis a deeper investigation shows that owning bank subsidiaries outside the home country is a source of increased fragility during normal times yet a source of higher stability during the local crisis but not during the international crisis moreover owning foreign subsidiaries in one or two world regions is insufficient to neutralize both types of crises while being present in three or more regions is more stabilizing during a local crisis but also more destabilizing during an international crisis our findings contribute to the literature examining bank stability and have several policy implications

investigating the multivariate granger causality between energy consumption economic growth and co2 emissions in ghana abstract the economy of ghana continues to witness a rising demand for energy coupled with growth in gross domestic product that follows a wavy trajectory in the midst of this economic phenomenon there is a trend of increasing greenhouse gas emissions with attendant economic health and environmental consequences this paper examines the causal interdependence between energy consumption economic growth and co 2 emissions in ghana from 1960 to 2015 by using the toda yamamoto and granger causality tests the johansen and johansen juselius cointegration approach and the autoregressive distributed lag bounds test approach are employed to test for cointegration relationship the results show that the variables are cointegrated the causality tests reveal that there is feedback granger causality between energy consumption and co 2 emissions since there is a causal link between energy consumption and economic growth with its concomitant effect on co 2 emissions any energy conservation oriented policy not derived from energy efficiency and technological progress may hurt the ghanaian economy in effect more effort should be aimed at improving energy efficiency through technological progress and investment should be made in renewable energy to reduce over reliance on fossil fuels

measuring the efficiency cost of taxing risky capital income this paper derives a measure of the efficiency cost of taxing risky capital income in an infinite horizon stochastic model the resulting expression differs from all those proposed in the existing literature the correct measure of efficiency cost will normally be smaller than any of those used in policy studies possibly dramatically so uncertainty changes the expression for efficiency cost through effects arising not only from stochastic capital gains on existing capital but also from stochastic costs of replacing existing capital the latter effect reduces efficiency costs and normally outweighs the first effect copyright 1989 by american economic association

the marginal welfare cost of capital taxation discounting matters we interpret the marginal welfare cost of capital income taxes as the present discounted value of consumption distortions such an asset market interpretation emphasizes the importance of the interest rate used to value future distortions especially in the presence of uncertainty we find that the interest rate decreases as the tax rate increases thus increasing the welfare cost the variations in the interest rate are caused by amplified responses of consumption to exogenous shocks as a result of capital taxation the welfare cost may be underestimated if variations in interest rates are ignored especially when tax rates are high

the debt crisis lessons of the 1980s for the 1990s abstract one of the salient characteristics of the 1980s is the growth collapse of the latin american debtor countries the debt overhang literature claims that the debt crisis is the main reason for the growth collapse however previous empirical work has failed to support this hypothesis we re examined this hypothesis further using simulation and econometric methods we found that once we account for the effects of social inequality on government policy and consumption the burden of servicing the debt becomes an important factor in explaining the collapse in investment and output growth in latin america we draw some conclusions for the 1990s

the welfare cost of factor taxation in a perfect foresight model this paper examines the marginal efficiency cost of various factor taxes in a dynamic general equilibrium model the au thor solves for the excess burden of anticipated and unanticipated t emporary and permanent tax policies using a range of estimates for taste and technology parameters he finds excess burdens larger than those indicated by previous studies that use static models these exc ess burdens are sensitive to parameter values and timing however th e rankings of alternative tax policies turn out to be insensitive to structural parameter values copyright 1987 by university of chicago press

private investment and democracy in latin america abstract this paper argues that the deterioration of latin american private investment in the 1980s may have been largely due to debt difficulties and not the concurrent wave of democratization after reviewing why more political systems may actually be conducive to investment we test an investment function for seven countries over 1973 1986 that includes traditional economic factors two debt measures and several political variables including measures of democracy worker power international monetary fund support and risk the results are quite congenial for our hypothesis under several reasonable alternative specifications for the economic determinants our democracy measure is positively signed and significant

energy consumption income and carbon emissions in the united states abstract this paper investigates the effect of energy consumption and output on carbon emissions in the united states earlier research focused on testing the existence and or shape of an environmental kuznets curve without taking energy consumption into account we investigate the granger causality relationship between income energy consumption and carbon emissions including labor and gross fixed capital formation in the model we find that income does not granger cause carbon emissions in the us in the long run but energy use does hence income growth by itself may not become a solution to environmental problems

energy consumption and gdp in turkey is there a co integration relationship energy consumption and gdp are expected to grow by 5 9 and 7 annually until 2025 in turkey this paper tries to unfold the linkage between energy consumption and gdp by undertaking a co integration analysis for turkey with annual data over the period 1970 2003 the analysis shows that energy consumption and gdp are co integrated this means that there is a possibly bi directional causality relationship between the two we establish that there is a unidirectional causality running from gdp to energy consumption indicating that energy saving would not harm economic growth in turkey in addition we find that energy consumption keeps on growing as long as the economy grows in turkey

who is afraid of political instability abstract an unstable macroeconomic environment is often regarded as detrimental to economic growth among the sources contributing to such instability much of the blame has been assigned to political issues this paper empirically tests for a causal and negative long run relation between political instability and economic growth but finds no evidence of such a relationship sensitivity analysis indicates that there is a contemporaneous negative relationship but also that in the long run and ignoring institutional factors the group of african countries plays the determining role

energy consumption economic growth and carbon emissions challenges faced by an eu candidate member abstract this paper investigates the long run granger causality relationship between economic growth carbon dioxide emissions and energy consumption in turkey controlling for gross fixed capital formation and labor the most interesting result is that carbon emissions seem to granger cause energy consumption but the reverse is not true the lack of a long run causal link between income and emissions may be implying that to reduce carbon emissions turkey does not have to forgo economic growth

logical deficiencies in spatial models a constructive critique a fundamental property of any good theoryis logical consistency however two commonassumptions in the rational choice approach topolitical analysis that induced preferences overpolicy are separable and that such preferences areindependent of changes in exogenous factors are notconsistent with the archetypal assumptions ofindividual utility maximization these particularpathologies of spatial models of politics have notbeen well recognized in the political scienceliterature

a literature survey on energy growth nexus abstract this paper provides a survey of the recent progress in the literature of energy consumption economic growth and electricity consumption economic growth causality nexus the survey highlights that most empirical studies focus on either testing the role of energy electricity in stimulating economic growth or examining the direction of causality between these two variables although the positive role of energy on growth has become a stylized fact there are some methodological reservations about the results from these empirical studies a general observation from these studies is that the literature produced conflicting results and there is no consensus neither on the existence nor on the direction of causality between energy consumption electricity consumption and economic growth as a policy implication to avoid from conflicting and unreliable results the authors may use the autoregressive distributed lags bounds test two regime threshold co integration models panel data approach and multivariate models including new variables such as real gross fixed capital formation labor force carbon dioxide emissions population exchange rates interest rates etc thus the authors should focus more on the new approaches and perspectives rather than by employing usual methods based on a set of common variables for different countries and different intervals of time

energy consumption and economic growth in central america evidence from a panel cointegration and error correction model abstract this study examines the relationship between energy consumption and economic growth for six central american countries over the period 1980 2004 within a multivariate framework given the relatively short span of the time series data a panel cointegration and error correction model is employed to infer the causal relationship based on the heterogeneous panel cointegration test by pedroni pedroni p 1999 critical values for cointegration tests in heterogeneous panels with multiple regressors oxford bulletin of economics and statistics 61 653 670 pedroni p 2004 panel cointegration asymptotic and finite sample properties of pooled time series tests with an application to the ppp hypothesis new results econometric theory 20 597 627 cointegration is present between real gdp energy consumption the labor force and real gross fixed capital formation with the respective coefficients positive and statistically significant the granger causality results indicate the presence of both short run and long run causality from energy consumption to economic growth which supports the growth hypothesis