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

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

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

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

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

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

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

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

volatility in productivity and the impact on unemployment volatility and the uncertainty it creates has long been recognized as a factor in economic decision making since hiring occurs before shocks to productivity are realized firms investment in ne

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

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

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

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

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

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

another perspective on the effects of inflation uncertainty this paper examines the effects of inflation uncertainty on real economic activity by utilizing a flexible dynamic multivariate framework that accommodates possible interaction between the conditional means and variances the empirical model is based on a familiar identified vector autoregressive framework modified to accommodate multivariate generalized autoregressive conditional heteroskedasticity our empirical model is preferred to the baseline var by likelihood based information criteria and it retains the important dynamics of the underlying var we find that an average shock to inflation uncertainty has tended to reduce output growth over three months by about 22 basis points

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

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

testing the moderating role of financial development in an environmental kuznets curve empirical evidence from turkey abstract employing second generation econometric procedures that consider multiple structural breaks in the series this article examines turkey as a case study in the investigation of the moderating role of financial development in a conventional environmental kuznets curve ekc the study uses two separate models for this purpose 1 the main effects model and 2 the interaction effects model the results of this investigation suggest a long term equilibrium relationship between financial development and the ekc in turkey using both model options financial development has been found to moderate the effect of real output on carbon dioxide emissions in the shorter periods negatively which signifies successful environmental performance and energy management in comparison financial development moderates the effect of real output on carbon dioxide emissions in the longer periods positively and in which this finding again signifies that policies for energy savings and green house targets need to be established to target longer periods and energy management policies at higher levels of economic activity the present study did not confirm a significant moderating effect of financial development on the impact of energy consumption on carbon dioxide emissions in the case of turkey

financial development and economic growth international evidence the importance of the relationship between financial development and economic growth has been well recognized and emphasized in the field of economic development 1 although recent writings on this subject seem to accept the hypothesis that financial development is crucial for successful economic growth 2 patrick asked the critical question which sector financial or real leads in the dynamic process of economic development patrick identified two possible patterns in the causal relationship between financial development and economic growth in the first growth induces an expansion of the financial system 3 according to this view called demand following the lack of financial growth is a manifestation of the lack of demand for financial services as the real side of the economy develops its demands for various new financial services materialize and these are met rather passively from the financial side in the second pattern the expansion of the financial system precedes the demand for its services channeling scarce resources from small savers to large investors according to relative rates of return the financial sector precedes and induces real growth the deliberate establishment and promotion of financial institutions in many less developed countries ldcs might reflect this belief in the supply leading relationship between the two developments a natural question then concerns the direction of causality between financial development and economic growth patrick asserted that the direction of causality changes over the course of development in his view financial development is able to induce real innovation type investment before sustained modern economic growth gets under way and as the process of real growth occurs the supply leading impetus gradually becomes less important and the demand following financial response

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

the direction of causality between financial development and economic growth abstract this paper employs the geweke decomposition test on pooled data of 109 developing and industrial countries from 1960 to 1994 to examine the direction of causality between financial development and economic growth the paper finds that 1 financial development generally leads to economic growth 2 the granger causality from financial development to economic growth and the granger causality from economic growth to financial development coexist 3 financial deepening contributes more to the causal relationships in the developing countries than in the industrial countries 4 the longer the sampling interval the larger the effect of financial development on economic growth 5 financial deepening propels economic growth through both a more rapid capital accumulation and productivity growth with the latter channel being the strongest

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

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

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

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

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

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

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

assessing the impact of interest rates in less developed countries abstract empirical results obtained do not unambiguously support what one should expect on the basis of conventional economic theory cross country evidence on the average relationship for 64 ldcs during the period 1971 1980 between some of the macroeconomic variables such as rate of growth of real gdp real financial assets saving income and investment income ratios and rate of return on investment on the one hand and the level of the real interest rate on the other is analyzed by applying a non parametric mann whitney test it is found that there is no difference with any statistical significance between the two groups of ldcs above and below the mean real interest rate this implies that the level of the real interest rate by itself has little or no impact on the selected macroeconomic variables

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

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

financial development and economic growth abstract this paper examines the empirical relationship between long run growth and financial development proxied by the ratio between bank credit to the private sector and gdp we find that this proxy is positively correlated with growth in a large cross country sample but its impact changes across countries and is negative in a panel data for latin america we argue that the latter findings is the result of financial liberalization in a poor regulatory environment our findings also show that the main channel of transmission from financial development to growth is the efficiency rather than the volume of investment

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

equilibrium selection in sequential games with imperfect information abstract games with imperfect information often feature multiple equilibria which depend on beliefs off the equilibrium path standard selection criteria such as passive symmetric or wary beliefs rest on ad hoc restrictions on beliefs we propose a new selection criterion that imposes no restrictions on beliefs we select the action profile that is supported in equilibrium by the largest set of beliefs we conduct an experiment to compare the predictive power of the existing and our novel selection criteria in an application on vertical multi lateral contracting we find that our criterion outperforms the other selection criteria

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

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

manufacturing growth and financial development evidence from oecd countries recent theoretical models conjecture that the development of the financial sector is essential for economic growth we investigate this hypothesis from a time series perspective and find that financial sector gdp is cointegrated for many oecd countries not so much with manufacturing gdp but mostly with manufacturing total factor productivity moreover this relation is in some instances characterized by long run causality in the sense of granger and lin however even within this homogeneous group of countries the variety of results suggests a more complex picture than is apparent from cross sectional evidence

payoff levels loss avoidance and equilibrium selection in games with multiple equilibria an experimental study i introduction game theoretic solution concepts carry the implication that a change in payoff levels a modification to a game by adding the same positive or negative constant to all payoffs should have no effect on behavior such changes do not affect expected payoff differences between strategies under any given beliefs about opponents actions so that best response correspondences and therefore nash equilibria pure or mixed are unaffected when the game has multiple nash equilibria game theory does not rule out the possibility that payoff level changes will lead to a change in which equilibrium is played but it does not predict when such sensitivity will be present or how it will be manifested when the game has a unique equilibrium game theory specifically predicts that changing payoff levels can have no effect so game theory is at least silent as to whether changes in payoff levels can affect players choices and at most explicitly rules out such an effect this implication relies however on the game s payoffs reflecting the true preferences of the players that is the equivalence between payoffs and expected utilities when payoffs are monetary gains or losses as in economics experiments with human subjects this equivalence cannot be taken for granted and the robustness of behavior to changes in payoff levels becomes an empirical question indeed there is evidence dating back at least to kahneman and tversky 1979 suggesting that payoff level changes can affect behavior 1 while their prospect theory was not developed specifically with payoff level effects in mind it can in some cases yield specific predictions for how they ought to affect behavior more recently cachon and camerer 1996 found that decisions in a coordination game experiment could be sensitive to changes in payoff levels when these changes affected the signs of payoffs positive payoffs became negative or vice versa they noted that their results could be explained by loss avoidance which they defined to be a tendency to avoid choices that with certainty yield negative payoffs in favor of alternatives that could yield positive payoffs 2 on the basis of this finding they conjectured that loss avoidance could be used as a criterion for equilibrium selection cachon and camerer s notion of loss avoidance is one of several ways that individuals could treat losses and gains differently in this paper we distinguish between their notion which we call certain loss avoidance and another type which we call possible loss avoidance and define as a tendency to avoid strategies that give a possible negative payoff in favor of one that gives a certain positive payoff we will sometimes use the term loss avoidance to encompass both certain and possible loss avoidance 3 the goal of this paper is to test for loss avoidance in strategic behavior in cases where payoffs are expected money payments to do so we design and conduct an experiment using a stage game well suited for such a test stag hunt a symmetric two player game with one risky action and one safe action and with multiple nash equilibria figure 1 shows three versions of stag hunt with the risky and safe actions labeled r and s these games differ only in payoff level so they are equivalent from a game theoretic standpoint as long as the payoffs represent the players preferences for example they have the same three nash equilibria the pure strategy equilibria r r and s s and a mixed strategy equilibrium in which both players choose r with probability 2 3 when these payoffs represent monetary gains and losses then despite this seeming equivalence our notions of loss avoidance make qualitative predictions regarding how individuals choices might change across the games in the high payoff game shh all payoffs are gains so neither type of loss avoidance will have an effect on behavior

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

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

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

evolution of modern business cycle models accounting for the great recession modern business cycle theory focuses on the study of dynamic stochastic general equilibrium dsge models that generate aggregate fluctuations similar to those experienced by actual economies we discuss how these modern business cycle models have evolved across three generations from their roots in the early real business cycle models of the late 1970s through the turmoil of the great recession four decades later the first generation models were real that is without a monetary sector business cycle models that primarily explored whether a small number of shocks often one or two could generate fluctuations similar to those observed in aggregate variables such as output consumption investment and hours these basic models disciplined their key parameters with micro evidence and were remarkably successful in matching these aggregate variables a second generation of these models incorporated frictions such as sticky prices and wages these models were primarily developed to be used in central banks for short term forecasting purposes and for performing counterfactual policy experiments a third generation of business cycle models incorporate the rich heterogeneity of patterns from the micro data a defining characteristic of these models is not the heterogeneity among model agents they accommodate nor the micro level evidence they rely on although both are common but rather the insistence that any new parameters or feature included be explicitly disciplined by direct evidence we show how two versions of this latest generation of modern business cycle models which are real business cycle models with frictions in labor and financial markets can account respectively for the aggregate and the cross regional fluctuations observed in the united states during the great recession

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

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

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

an axiomatic theory of a risk dominance measure for bipolar games with linear incentives bipolar games are normal form games with two pure strategies for each player and with two strict equilibrium points without common equilibrium strategies a normal form game has linear incentives if for each player the difference between the payoffs for any two pure strategies depends linearly on the probabilities in the mixed strategies used by the other players a measure of risk dominance between two strict equilibrium points of a bipolar game with linear incentives is characterized by 11 axioms journal of economic literature classification number c72

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

macro economic effects of changes in bank interest rates simulation results for south korea abstract we use an empirical macro econometric model of korea to simulate the impact of bank interest rate changes this model includes a very detailed sub model of the financial sector plus in addition to the usual demand side transmission channels of monetary policy a link between the financial sector and the supply side of the real part of the economy via the cost of financing working capital cavallo effect increases in time deposit rate are shown to be contractionary in the short run because the portfolio shifts they trigger tighten credit conditions and cause higher costs of financing working capital people shift out of the curbmarket rather than out of cash the higher cost of financing working capital also pushes up inflation in the first quarter after the change making the increase in td rates stagflationary this effect dies out quickly however the persistence of the loss in output is shown to depend on whether the commercial banks are allowed to play their intermediary role or not if credit limits prevent the passing through into bank loans of the influx of time deposits caused by the higher rates substantial and persistent real output losses and decreased private investment were shown to result

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

risk dominance and perfect foresight dynamics in n player games abstract in perfect foresight dynamics an action is linearly stable if expectation that people will always choose the action is self fulfilling a symmetric game is a pim game if an opponent s particular action maximizes the incentive of an action independently of the rest of the players this class includes supermodular games games with linear incentives and so forth we show that in pim games linear stability is equivalent to u dominance a generalization of risk dominance and that there is no path escaping a u dominant equilibrium existing results on n player coordination games games with linear incentives and two player games are obtained as corollaries

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

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

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

the effects of real and nominal uncertainty on inflation and output growth some garch m evidence in this paper we use garch m methods to test four hypotheses about the effects of real and nominal uncertainty on average inflation and output growth in the united states from 1948 to 1996 we find no evidence that higher inflation uncertainty or higher output growth uncertainty raises the average inflation rate we also find no support for the idea that more risky output growth is associated with a higher average real growth rate our key result is that in a variety of models and sample periods inflation uncertainty significantly lowers real output growth copyright 2000 john wiley sons ltd

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

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

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

risk attitudes and the stag hunt game a stag hunt game with the risky and safe actions has two pure nash equilibria that are pareto rankable the risky action leads either to the pareto superior equilibrium high payoff or to out of equilibrium low payoff depending on the opponent s action both players may want to obtain high payoff but uncertainty about the opponent s action may prevent them to take such strategic risk this paper investigates how information about the risk attitude of an opponent affects a player s action choice in the stag hunt game i find that although a subject s propensity to choose the risky action depends on her opponent s risk attitude it does not depend on her own risk attitude

stagflationary effects of monetary stabilization policies a quantitative analysis of south korea this paper presents a macro model of the korean economy that focuses on short run macro economic adjustment and more in particular on the transmission channels of monetary policy between the financial and the real sector of the economy in addition to the usual link between monetary policy and aggregate demand via investment the link between monetary policy and the supply side of the economy via the financing of working capital with borrowed funds is incorporated this link can potentially reverse the short run impact of tight money on inflation and aggregate the impact on output both export prices and domestic prices show a significant sensitivity to cost of financing working capital this credit supply side link gives a stagflationary bias to restrictive credit policies the empirical relevance of this phenomenon is strongly supported by the simulation results derived with the model structurally section 2 of the paper focuses on the real sector part of the model section 3 discusses the financial sector in section 4 different monetary stabilization packages are simulated using the model presented in sections 2 and 3 and alternative policy measures are discussed the simulation runs show strong short run stagflationary effects of tight money policies