financial markets and growth the last five years have witnessed a resurgence of interest in the relationship between financial intermediation and economic growth this issue had been extensively studied nearly two decades earlier by goldsmith 1969 mckinnon 1973 shaw 1973 and others who produced considerable evidence that financial development correlates with growth but their work though insightful lacked analytical foundations in traditional growth theory financial intermediation could be related to the level of the capital stock per worker or to the level of productivity but not to their respective growth rates the latter were ascribed to exogenous technical progress the recent revival of interest in the link between financial development and growth stems mainly from the insights and techniques of endogenous growth models which have shown that there can be self sustaining growth without exogenous technical progress and that the growth rate can be related to preferences technology income distribution and institutional arrangements this provides the theoretical underpinning that early contributors lacked tinancial intermediation can be shown to have not only level effects but also growth effects the resulting models have offered important insights into the effect of financial development on growth and vice versa they have also provided new impetus to empirical research on these issues this paper reviews the ground covered so far on the theoretical and empirical front and points to some still unresolved issues

natural resources curse or blessing are natural resources a curse or a blessing the empirical evidence suggests that either outcome is possible this paper surveys a variety of hypotheses and supporting evidence for why some countries benefit and others lose from the presence of natural resources these include that a resource bonanza induces appreciation of the real exchange rate deindustrialization and bad growth prospects and that these adverse effects are more severe in volatile countries with bad institutions and lack of rule of law corruption presidential democracies and underdeveloped financial systems another hypothesis is that a resource boom reinforces rent grabbing and civil conflict especially if institutions are bad induces corruption especially in nondemocratic countries and keeps in place bad policies finally resource rich developing economies seem unable to successfully convert their depleting exhaustible resources into other productive assets the survey also offers some welfare based fiscal rules for harnessing resource windfalls in developed and developing economies

oil volatility and sovereign risk of brics abstract we study the dependence between oil implied volatility shocks and brics sovereign risk from july 2009 to march 2017 first we examine spillovers in value at risk using multivariate regression quantiles and reveal that oil volatility represents a common risk for oil exporting and oil importing brics countries we also employ a quantile impulse response function and reveal the presence of an asymmetry in the mechanisms of shock transmissions between oil exporters russia and brazil and oil importers china and india the former are more sensitive to positive oil shocks whereas the latter are more sensitive to negative oil shocks second we measure the directional predictability in the quantiles using the bivariate cross quantilogram approach and show that in most cases a low high volatility of oil market predicts low high sovereign risk at various quantiles and lags policy implications are discussed

risk spillovers between oil and stock markets a var for var analysis abstract this article investigates the risk spillover effect between oil and stock markets using a novel multivariate quantile model i e the var for var approach and pseudo impulse response functions we explore the risk spillover at different quantiles using daily data over the period from january 4 2000 through august 31 2018 our results indicate the asymmetry in spillover effect which is significant at upside quantiles but not significant at downside quantiles based on subsample analysis we find that the risk spillover becomes stronger after 2008 financial crisis while before the crisis the spillover effect is very weak the international evidence shows that the asymmetric risk spillover can also be found in other six major stock indices of the g7 group

persistent and transient productive inefficiency in a regulated industry electricity distribution the productive efficiency of a firm can be decomposed into two parts one persistent and one transient this distinction seems to be appealing for regulators during the last decades public utilities such as water and electricity have witnessed a wave of regulatory reforms aimed at improving efficiency through incentive regulation most of these regulation schemes use benchmarking namely measuring companies efficiency and rewarding them accordingly focusing on electricity distribution we sketch a theoretical model to show that an imperfectly informed regulator may not disentangle the two parts of the cost efficiency therefore the regulator may fail to set optimal efficiency targets which also undermines quality we then provide evidence on the presence of persistent and transient efficiency using data on 28 new zealand electricity distribution companies between 2000 and 2011 first we estimate a total cost function by means of traditional stochastic frontier models for panel data these come up with an estimation of the persistent part or the transient part of the cost efficiency finally we use the more recent generalized true random effects model that allows for the simultaneous estimation of both transient and persistent efficiency we also find some evidence that persistent efficiency is associated to higher quality and wrong efficiency targets are associated to lower quality compliance

oil vulnerability index of oil importing countries abstract this paper assesses the relative oil vulnerability of 26 net oil importing countries for the year 2004 on the basis of various indicators the ratio of value of oil imports to gross domestic product gdp oil consumption per unit of gdp gdp per capita and oil share in total energy supply ratio of domestic reserves to oil consumption exposure to geopolitical oil market concentration risks as measured by net oil import dependence diversification of supply sources political risk in oil supplying countries and market liquidity the approach using the principal component technique has been adopted to combine these individual indicators into a composite index of oil vulnerability such an index captures the relative sensitivity of various economies towards developments of the international oil market with a higher index indicating higher vulnerability the results show that there are considerable differences in the values of individual indicators of oil vulnerability and overall oil vulnerability index among the countries both inter and intraregional

dynamic cyclical comovements of oil prices with industrial production consumer prices unemployment and stock prices abstract this paper examines the empirical relationship between oil prices and several key macroeconomic variables in particular we investigate the cyclical comovements of crude oil prices with output consumer prices unemployment and stock prices the methodology involves the use of the hodrick prescott hodrick r j prescott e c 1980 post war us business cycles an empirical investigation working paper carnegie mellon university and baxter king baxter m king r g 1999 measuring business cycles approximate band pass filters for economic time series review of economics and statistics 81 575 593 filters as well as the recently developed full sample asymmetric christiano fitzgerald christiano l j fitzgerald t j 2003 the band pass filter international economic review 44 435 465 band pass filter contemporaneous and cross correlation estimates are made using the stationary cyclical components of the time series to make inference about the degree to which oil prices move with the cycle besides documenting a number of important cyclical relationships using three different time series filtering methods the results suggest that crude oil prices are procyclical and lag industrial production additionally we find that oil prices lead consumer prices

was latin america too rich to prosper structural and political obstacles to export led industrial growth this essay explores the divergence in economic policy and performance between east asia and latin america it offers a typology of explanations from the political economy literature evidence is presented for an explanation focused upon the relative size of the income sacrifice entailed in the competitive export of simple manufactures in the 1960s latin american countries would have faced massive politically unthinkable currency devaluations had they sought to compete with east asia thus latin american dependency in the post war period has been more complex than often supposed the essay ends with thoughts on export led industrialisation in indebted latin america

how do global investors differentiate between sovereign risks the new normal versus the old abstract when global investors go into emerging markets or get out of them how do they differentiate between economies has this behavior changed since the crisis of 2008 to reflect a new normal we consider these questions by focusing on sovereign risk as reflected in monthly returns on credit default swaps cds for 18 emerging markets and 10 developed countries tests for breaks in the time series of such returns suggest a new normal that ensued around october 2008 or soon afterwards dividing the sample into two periods and extracting risk factors from cds returns we find an old normal in which a single global risk factor drives half of the variation in returns and a new normal in which that risk factor becomes even more dominant surprisingly in both the old and new normal the way countries load on this factor depends not so much on economic fundamentals as on whether they are designated an emerging market

hybrid revenue caps and incentive regulation abstract this paper analyzes the incentive effects of a hybrid revenue cap on a regulated monopolistic firm using non discriminatory two part pricing it is shown that the fixed and the variable part of the cap have different meanings in terms of regulation the fixed part of a hybrid revenue cap should be used to control the profit level of the regulated firm while the variable part should be used to control the social efficiency level since detailed information about the firm s cost function is required to determine the revenue cap parameters the overall conclusion is that revenue caps are a rather bad idea in the area of incentive regulation

global potential for carbon sequestration geographical distribution country risk and policy implications abstract we have provided a framework for identifying least cost sites for afforestation and reforestation and deriving carbon sequestration cost curves at a global level in a scenario of limited information special attention is given to country risk in developing countries and the sensitivity to spatial datasets our model results suggest that within 20 years and considering a carbon price of us 50 tc tree planting activities could offset 1 year of global carbon emissions in the energy sector however if we account for country risk considerations associated with political economic and financial risks carbon sequestration is reduced by approximately 60 with respect to the geography of supply illustrated by grid scale maps we find that most least cost sites are located in regions of developing countries such as the sub sahara southeast brazil and southeast asia

the curse of natural resources in fractionalized countries abstract this paper develops a model that can explain why natural resources are a blessing for some countries but a curse for others in this model natural resources cause fighting activities between rivalling groups fighting reduces productive activities and weakens property rights making productive activities even less attractive the aggregate production decrease exceeds the natural resources direct positive income effect if and only if the number of rivalling groups is sufficiently large the model thus predicts that natural resources lower incomes in fractionalized countries but increase incomes in homogenous countries empirical evidence supporting this prediction is provided

oil shocks and financial systemic stress international evidence abstract by conducting a structural var analysis on the financial systemic stress in 20 countries this paper provides international evidence that oil structural shocks impact not only stress in individual financial markets but also their connectedness the oil structural shocks explain a large fraction of the variation in the connectedness among various financial markets the effect of oil structural shocks on financial systemic stress is largely dependent on the origins of oil price changes and a country s net oil export position in most oil importing economies financial systemic stress is negatively impacted by supply and aggregate demand shocks and positively impacted by oil market specific demand shocks opposite patterns are detected in oil exporting economies the effects of the spillovers are asymmetrically related with market conditions during normal periods more risks are spilled over from the oil market to financial systems but during financial crises the opposite occurs in periods of financial crises and oil price collapses there is noticeable contagion between the oil market and financial systems

what enables rapid economic progress what are the needed institutions abstract in recent years institutions have again become a central focus of economists and other scholars studying the processes of economic growth and the reasons why nations have differed so greatly in their achievements on this front however with few exceptions the exploration of the role of institutions has not been connected with a coherent analysis of the relationships between institutions and institutional change and technological advance this paper proposes a way of analyzing these relationships the concept of social technologies which support physical technologies plays a key role in the analysis

resource revenue management and wealth neutrality in norway abstract an important idea behind the norwegian oil fund mechanism and the fiscal spending rule is to protect the non oil economy from the adverse effects of excessive spending of resource revenues over the government budget a critical assumption in this respect is that public sector saving is not being offset by private sector dis saving which is at stake with the hypothesis of ricardian equivalence based on a framework of co integrating saving rates this model provides an empirical test of the ricardian equivalence hypothesis on norwegian time series data although the model rejects the strong form presence of ricardian equivalence results indicate that the norwegian approach does not fully succeed in separating spending of resource revenues from the accrual of the same revenues

the mechanics of commercial banking liberalization and growth abstract this paper formalizes the effects of liberalization across the border of deposit taking and lending activities on the regime of competition in the banking market and on the rate of growth of the economy we extend two economy based deidda 2006 s banking model in which originally each economy hosts at least one operating bank we introduce two gats defined modes of commercial banking liberalization namely the commercial presence mode and the cross border mode additionally we introduce the possibility of strategic behavior by competing banks in equilibrium the extended model provides a causal link between the cost structure of the banking industry the regime of competition in the liberalized banking sector and the rate of growth of the economy under alternative modes of liberalization in particular we show a threshold effect in terms of economic development above certain economic development the banking sector operates competitively and supports an accelerating rate of growth generating a bidirectional self reinforcing link between commercial banking liberalization and growth the pace of growth is further increased with respect to a scenario where such behavior is not present by the presence of strategic behavior by competing banks in equilibrium

the directional volatility connectedness between crude oil and equity markets new evidence from implied volatility indexes in this paper we use a set of newly introduced implied volatility indexes to investigate the directional connectedness between oil and equities in eleven major stock exchanges around the globe from 2008 to 2015 the inference on the oil equity implied volatility relationships depends on diebold and yilmaz 2012 2014 2015 who proposed a set of directional measures that enable the dynamic and directional characterization of the relationships among financial variables we find uniform results across the sample countries indicating that the connectedness between oil and equity is established by the bi directional information spillovers between the two markets however we find that the bulk of association is largely dominated by the transmissions from the oil market to equity markets and not the other way around the pattern of transmissions is varying over the sample period however most of the linkages between oil and equities are established from the mid of 2009 to the mid of 2012 which is a period that witnessed the start of global recovery

the effects of average revenue regulation on electricity transmission investment and pricing this paper investigates the long run effects of average revenue regulation on an electricity transmission monopolist who applies a two part tariff comprising a variable congestion price and a non negative fixed access fee a binding constraint on the monopolist s expected average revenue lowers the access fee promotes transmission investment and improves consumer surplus in a case of any linear or log linear electricity demand function with a positive probability that no congestion occurs average revenue regulation is allocatively more efficient than a coasian two part tariff if the level of capacity under average revenue regulation is higher than that under a coasian two part tariff

price discrimination and social welfare studies the effect of price discrimination on social welfare using methods from duality theory features of the reservation model presented quasi linear utility and consumers surplus upper and lower bounds on welfare change bounds on welfare change with optimal price discrimination from ebsco

economic exposure and integrated risk management most corporate risk management research focuses on particular risk exposures to the exclusion of other interrelated exposures by contrast this study models corporate risk exposures using a multivariate approach integrating the distinct exposures of interest to finance international business and strategy researchers the paper addresses the implications of multivariate modeling for corporate risk management some key methodological issues arising in empirical estimation of corporate economic exposures and directions for research on integrated risk management 1998 john wiley sons ltd

ex ante implications of sovereign default i study how the possibility of default on external debts affects other capital allocation decisions in a small open economy in the model default has an option value derived from the randomization over ex post default regimes which depends on country specific productivity shocks this feature of default reduces incentives for ex ante diversification which would reduce exposure to the productivity shock as a result if the economys debt to capital ratio is allowed to cross a fixed threshold identified in the model the unique equilibrium exhibits an allocation of capital that is less productive in expectation and more volatile than in a benchmark model without default the model therefore captures a number of salient features of emerging and less developed countries where low levels of international risk sharing have gone hand in hand with frequent and recurring default events

global energy security and the implications for the eu abstract the following article will analyse the global and geopolitical dimensions of the future international energy security and its implications for europe and the eu 27 in this context i will discuss to which extent the eu s newly proclaimed energy action plan of the eu spring summit of 2007 and its declared common energy foreign policy are a sufficient strategy to cope with the new global and geopolitical challenges the article concludes the following 1 the interlinkage between globally designed traditional energy security concepts that rely just on economic factors and market strategies and domestic as well as regional political stability demands new thinking with regard to both energy supply security and foreign and security policies 2 although after the russian ukrainian gas conflict in january 2006 energy security has forced its way up the european energy and foreign policy agendas the eu 27 member states have largely failed to forge a coherent european energy security and energy foreign policy strategy after their spring summit of 2007 because its declared political solidarity has been still lacking but the 2nd strategic energy review of november 2008 has recommended new initiatives to overcome this lack by promoting concrete infrastructure and other projects for enhancing europe s supply security and its political solidarity as part of a common energy foreign policy if the eu is able to implement the march 2007 and november 2008 decisions the eu oil and gas demand will drastically reduce and freeze at current levels in this case putin s energy policies by using russia s energy resources and pipeline monopolies as a political instrument to enforce its economic and geopolitical interests will be proved as self defeating in russia s long term strategic interests it will reduce gazprom s gas exports to a much smaller eu gas market than originally forecasted as the result of a deliberate eu policy of decreasing its overall gas demand and by diversifying its gas imports

avoiding the resource curse the case norway in many countries natural resources have been detrimental to the economic development the literature on the resource curse shows a bleak relationship countries with large natural resources generally experience lower economic growth than other countries norway does not fit into this picture economic growth has much higher than in most other industrialized countries this paper describes the key features of the norwegian management of the petroleum resources the main focus is on the management of the revenues from the petroleum sector but the effects of the petroleum sector on the norwegian economy more generally are also discussed

transportation and storage under a dynamic price cap regulation process abstract we study the welfare effects of price cap regulation pcr and the strategic behavior it may induce in gas transportation networks by analyzing a stylized gas network within the framework of a multi period game model under three scenarios no regulation a dynamic setting where the price cap adjustment mechanism is not endogenized by the players and a dynamic setting where it is endogenized by the players

explaining credit default swap spreads by means of realized jumps and volatilities in the energy market abstract this paper studies the relationship between credit default swap cds spreads for the energy sector and oil futures dynamics using data on light sweet crude oil futures from 2004 to 2013 which contains a crisis period we examine the importance of volatility and jumps extracted from the futures in explaining cds spread changes the analysis is performed at an index level and by rating group as well as for the pre crisis crisis and post crisis periods our findings are consistent with merton s theoretical framework at an index level futures jumps are important when explaining cds spread changes with negative jumps having higher impact during the crisis the continuous volatility part is significant and positive indicating that futures volatility conveys relevant information for the cds market as for the analysis per rating group negative jumps have an increasing importance as the credit rating deteriorates and during the crisis period while the results for positive jumps and futures volatility are mixed overall the relation between the cds market and the futures market is stronger during volatile periods and strengthened after the global financial crisis

a new database on the structure and development of the financial sector this article introduces a new database of indicators of financial structure and financial development across countries and over time the database is unique in that it combines a wide variety of indicators that measure the size activity and efficiency of financial intermediaries and markets it improves on previous efforts by presenting data on the public share of commercial banks introducing indicators of the size and activity of nonbank financial institutions and constructing measures of the size of bond and primary equity markets this article introduces a new database the first to provide comprehensive measures of the development structure and performance of the financial sector this database is the first to define and construct indicators of the size and activity of nonbank financial intermediaries such as insurance companies pension funds and non deposit money banks it is also the first to include indicators of the size of primary equity markets and primary and secondary bond markets in constructing the database authors carefully deflate measures and match stock and flow variables

natural resources education and economic development economic growth since 1965 has varied inversely with the share of natural capital in national wealth across countries four main channels of transmission from abundant natural resources to stunted economic development are discussed a the dutch disease b rent seeking c overconfidence and d neglect of education public expenditure on education relative to national income expected years of schooling for girls and gross secondary school enrolment are all shown to be inversely related to the share of natural capital in national wealth across countries natural capital appears to crowd out human capital thereby slowing down the pace of economic development

tighter average revenue regulation can reduce consumer welfare a monopolist producing for two markets is subject to an average revenue constraint a form of regulation which is relevant to some u k utilities where marginal costs of serving the two markets differ tighter regulation may cause one of the prices to rise as shown by i bradley and c price 1988 a simple linear example demonstrates that total consumer surplus may fall as regulation becomes more stringent copyright 1995 by blackwell publishing ltd

financial development growth and the distribution of income a paradigm is presented in which both the extent of financial intermediation and the rate of economic growth are endogenously determined financial intermediation promotes growth because it allows a higher rate of return to be earned on capital and growth in turn provides the means to implement costly financial structures thus financial intermediation and economic growth are inextricably linked in accord with the goldsmith mckinnon shaw view on economic development the model also generates a development cycle reminiscent of the kuznet hypothesis in particular in the transition from a primitive slow growing economy to a developed fast growing one a nation passes through a stage in which the distribution of wealth across the rich and poor widens

institutions and the resource curse countries rich in natural resources constitute both growth losers and growth winners we claim that the main reason for these diverging experiences is differences in the quality of institutions more natural resources push aggregate income down when institutions are grabber friendly while more resources raise income when institutions are producer friendly we test this theory building on sachs and warner s influential works on the resource curse our main hypothesis that institutions are decisive for the resource curse is confirmed our results contrast the claims of sachs and warner that institutions do not play a role

booming sector and de industrialisation in a small open economy this paper presents a theoretical analysis of the dutch disease the phenomenon whereby a boom in one traded goods sector squeezes porfitability in other traded goods sectors both by directly bi

increasing returns and the genesis of american resource abundance the usa became the world s leading mineral producing nation between 1870 and 1910 a development paralleled by the rising resource intensity of american manufacturing this paper challenges the premise that resource abundance simply reflected the country s geological endowment of mineral deposits instead in the century following 1850 the usa exploited its natural resource potentials to a far greater extent than other countries and did so across virtually the entire range of industrial minerals the paper argues that natural resource abundance was an endogenous socially constructed condition that was not geologically preordained it examines the complex legal institutional technological and organizational adaptations that shaped the us supply responses to the expanding domestic and international industrial demands for minerals and mineral products it suggests that strong positive feedbacks even in the exploitation of depletable resources were responsible for the explosive growth of the american minerals economy

statistical properties of country risk ratings under oil price volatility evidence from selected oil exporting countries abstract this paper focuses on the application of panel models for identification and analysis of influence of oil price volatility on statistical properties of country risk ratings which stem from uncertainty of macroeconomic fluctuations firstly two statistical properties of country risk ratings volatility clustering and asymmetrical revision were identified in a theoretical framework based on cruces 2006 secondly considering the oil price volatility numerical experiments were conducted based on extended models to test and verify specific properties of country risk ratings in selected oil exporting countries empirical results suggest that properties of country risk remain comparatively steady despite oil price volatility it is also found that the oil price volatility can obviously exaggerate the country risk volatility as it happened during 2007 2009 country clustering based on the properties of country risk ratings shows that the selected countries maintain a significant clustering tendency these features are of great importance for estimating risk exposure of international trade and investments in oil export during extreme situations

dynamic nonlinear impacts of oil price returns and financial uncertainties on credit risks of oil exporting countries abstract this paper investigates the dynamic and nonlinear impact of oil price returns on the sovereign credit default swap cds spreads for the oil rich countries of the gulf cooperation council gcc and other important oil exporting countries namely venezuela mexico and russia we employ the standard quantile regression analysis the rolling quantile regression and finally the quantile on quantile qq approach that allows one to investigate the dependence dynamics of the sovereign cds spreads under different credit market conditions the empirical results show that oil price returns significantly and favorably decrease the sovereign credit risk premium of the non gcc oil exporting countries under consideration however the results also suggest no or little impact on the sovereign credit risk premium of saudi arabia uae and norway which have the most significant sovereign wealth funds in the world the negative i e favorable impact of oil price returns on the sovereign cds spreads where present gradually increases with the quantile level and is the highest during the bullish credit market conditions the results also show that those cds spreads are more sensitive to the global bond market uncertainty factor than to the global equity market uncertainty factor

modeling sovereign yield spreads a case study of russian debt we construct a model for pricing sovereign debt that accounts for the risks of both default and restructuring and allows for compensation for illiquidity using a new and relatively efficient method we estimate the model using russian dollar denominated bonds we consider the determinants of the russian yield spread the yield differential across different russian bonds and the implications for market integration relative liquidity relative expected recovery rates and implied expectations of different default scenarios this paper develops a model of the termstructure of credit spreads on sovereign bonds that accommodates i default or repudiation the sovereign announces that it will stop making payments on its debt ii restructuring or renegotiation the sovereign and the lenders agree to reduce or postpone the remaining payments and iii a regime switch such as a change of government or the default of another sovereign bond that changes the perceived risk of future defaults we build on the framework of duffie and singleton 1999 showing that cash flows promised by a sovereign bond can be discounted using a default adjusted short termdiscount rate that reflects the m ean arrival rate and associated losses in market value upon arrival of each of the aforementioned types of credit events since a sovereign credit event is often not a liquidation event the model allows for continued trading and pricing of a sovereign instrument through credit events possibly after writedowns in face value or cash distributions to creditors on credit event dates additionally we accommodate the possibility that bonds issued by the same sovereign of exactly the same type but possibly of different maturities may be priced in the market using different discount factors reasons for this may include i bond covenants may not include cross default clauses that would force upon the default of one bond the simultaneous default of other bonds of the same type but of a different maturity for various strategic reasons related to internal

restoring banking stability beyond supervised capital requirements emerging economies have been particularly prone to financial sector crises reflecting marked information asymmetries and political interference as well as the substantial volatility in underlying economic conditions and the vulnerability of banking and finance when structural economic changes create a new and uncharted operating environment the standard regulatory paradigm relies mainly on supervised capital adequacy but it may not be enough other measures to improve the incentive structure for bankers regulators and other market participants could effectively increase the number of concerned skilled and watchful eyes intermittent application of supplementary blunt instruments could also be useful

interaction between economic and financial development this paper presents a model of financial and economic development which assumes the consumption of real resources by the financial sector financial development occurs endogenously as the economy reaches a critical threshold of economic development compared to financial autarky financial intermediaries allocate savings net of their costs of operation to more productive investments whenever the technology financed by intermediaries is more capital intensive than that operated in financial autarky the growth effect of financial development is ambiguous as a result financial development may be unsustainable however when financial development is sustainable the credit market becomes more competitive and more efficient over time and this could eventually contribute to economic growth nonetheless given monopolistic competition in the financial sector the level of entry into the credit market is generally inefficient for instance with diminishing returns to specialisation entrants might be too few at the early stages of economic development and too many later on

the economic regulation of private industries by price constraints regulation of some newly privatised industries in the uk has been implemented by restricting annual price increases this paper analyses the two forms which such regulation has taken the tariff basket approach applied to british telecom and the average revenue constraint imposed upon british gas and the british airports authority the incentives given by the tariff basket constraint to a profit maximiser are likely to result in a more efficient price structure than would occur under an average revenue constraint demonstrating that the former is generally a superior form of regulation

is full banking integration desirable abstract we analyze the links between banking integration and economic development for a sample of oecd countries we measure banking integration considering indicators that merge not only openness but also connectedness with other banking systems we plug these indicators into income regressions also controlling for other relevant variables considered by the literature in contrast to previous initiatives this second stage explicitly takes into account the differing levels of economic development of the countries in our sample since the benefits of enhanced banking integration might not be generalizable to this end we implement quantile regression also considering the presence of endogenous regressors results show that bank connectedness is more important for economic development than bank openness but the combined effect i e banking integration overall is positive and significant the quantile regression models used in the second stage show that the effects are stronger for the poorest economies

tight average revenue regulation can be worse than no regulation price regulation of a multi market monopolist with the cap based on average revenue can cause welfare to be below the unregulated level in a model with linear demands and constant but unequal marginal costs a sufficient condition for this welfare effect is that the cap equals the average revenue that would be earned with marginal cost pricing relaxation of the price cap can lower all prices welfare with uniform pricing at the level of the price cap can be above or below the average revenue welfare level

natural resource dependence human capital accumulation and economic growth a combined explanation for the resource curse and the resource blessing abstract in existing studies no consensus has been reached on the relationship between natural resource dependence and human capital accumulation to narrow the divergence this paper carries out a normative research to explain the co existence of the phenomena of the resource curse and the resource blessing based on an organic combination of conceptual and mathematical models it first establishes a conceptual model to analyse the potential effects of the government s policy preference and natural resource development activities on human capital accumulation and economic growth furthermore it develops an endogenous growth model to normatively illuminate the effects in the conceptual model and to explore the condition for the occurrence of the resource curse the conceptual model analysis indicates that the rate of return on education investment and government behaviours play the crucial role in promoting the formation of the economic virtuous circle at the micro level and macro level respectively while resource development activities exert dual impacts on the circle the main mechanisms in the conceptual model can be validated in the mathematical model the rise in the subjective discount rate the elasticity of intertemporal substitution and resource goods price are adverse to the economic virtuous circle while high quality education and the institutional environment giving priority to manufacturing can become the necessary condition and sufficient condition for forming the circle respectively the allocation efficiency of production factors plays a decisive role in whether the blessing occurs whereas sufficient human capital is an essential guarantee for evading the curse

the dynamics of resource based economic development evidence from australia and norway australia and norway have achieved modern levels of development as resource based economies thus avoiding the so called resource curse their ability to achieve this rested heavily on repeated diversification into new resource products and industries these processes relied largely on innovation confirming the close ties that have existed between resource based industries and knowledge producing and disseminating sectors of society we develop a resource based diversification model that analyses the interaction between enabling sectors and resource industries and apply it to the historical experience of the two countries

oil price shocks and emu sovereign yield spreads abstract this study examines for the first time the relationship among the oil price shocks and the sovereign yield spreads in the emu which is collectively the largest oil importer of the world in a time varying environment in particular we examine the time varying correlation between oil price shocks and the 10 year sovereign yield spread of core and periphery countries in the emu by employing a scalar bekk framework the main findings reveal that the correlations between sovereign yield spreads and oil price shocks are indeed time varying and are influenced by specific economic and geopolitical events that took place during the study period furthermore even though the correlation patterns are constantly low or zero prior to the great recession a change is revealed in the post 2008 period when correlations become moderate and more volatile finally we do not observe noteworthy differences in the correlation behaviour between core and periphery countries to different oil price shocks the findings of this study are particularly useful and provide valuable information to marketplace participants

strategic nonlinear pricing under price cap regulation we examine profit maximizing nonlinear pricing under a stylized version of the fcc s price cap plan for at t whereby the firm s average revenue in each period is constrained not to exceed some fixed level when average revenue in each period is calculated as the ratio of total revenue in that period to output in the preceding period as in the fcc s plan for at t incentives are created for the firm to engage in strategic nonlinear pricing these incentives can lower both consumers surplus and total surplus under price cap regulation we propose alternative implementations of price cap regulation that eliminate these incentives for strategic pricing we also examine whether current profits should influence future revisions of the cap we show that small amounts of such linkage can enhance total surplus due to pricing distortions that arise under price cap regulation

welfare effects of price discrimination by a regulated monopolist should a multiproduct monopolist whose average price is capped by regulation be allowed to engage in third degree price discrimination if the cap applies to a price index with weights proportional to demands at uniform prices then price discrimination benefits consumers as well as the firm but if perhaps more realistically it is the firm s average revenue that is capped then consumers prefer uniform pricing in this case total output is higher when discrimination is allowed which increases welfare but marginal utilities differ across markets which is inefficient and the overall effect is ambiguous a small amount of discrimination is desirable however it is better not to allow price discrimination if the price cap is close to the level of marginal cost the consequences of tightening the price cap when discrimination is allowed are also examined

boom or gloom examining the dutch disease in two speed economies traditional studies of the dutch disease do not account for productivity spillovers between the booming resource sector and other domestic sectors we put forward a simple theory model that allows for such spillovers we then identify and quantify these spillovers using a bayesian dynamic factor model the model allows for resource movements and spending effects through a large panel of variables while also identifying disturbances to other shocks using australia and norway as representative cases studies we find that a booming resource sector has substantial productivity spillovers on non resource sectors effects that have not been captured in previous analysis

the origins of american industrial success 1879 1940 the united states became the world s preeminent manufacturing nation at the turn of the twentieth century this study considers the bases for this success by examining the factor content of trade in manufactured goods surprisingly the most distinctive characteristic of u s manufacturing exports was intensity in nonreproducible natural resources furthermnore this relative intensity was increasing between 1880 and 1920 the study then asks whether resource abundance reflected geological endowment or greater exploitation of geological potential it was mainly the latter jel 042 recent thinking about american economic performance has been marked by alarm over the country s loss of its competitive edge most of this discussion is not rooted in an understanding of the historical origins of the economic leadership now thought to be in jeopardy modern economists tend to assume that the american advantage has been technological and

sovereign default interest rates and political uncertainty in emerging markets abstract a large body of the empirical literature shows that high turnover rates length of tenure of policymakers and the degree of conflict within a country affects sovereign spreads debt and default rates we help to rationalize such claims by including these political features in a dynamic stochastic small open economy model of sovereign debt and default in this way we offer a complementary approach to the econometric analyses in the literature consistent with the data the quantitative analysis shows that politically unstable and more polarized economies experience higher default rates and larger level and volatility of sovereign interest rate spreads

dynamic relationship of oil price shocks and country risks abstract this study investigates the dynamic relationship between oil price shocks and country risks using a structural var framework for a sample of both net oil exporting and net oil importing countries over the period january 1994 december 2014 the results reveal that country risk is significantly affected by oil price shocks but the impacts are different unanticipated positive oil price shocks trigger a reduction addition in country risk for net oil exporting country net oil importing countries as to the responses of oil prices to country risk shock evidence show that country risk shocks have a delayed significantly positive impacts on oil price for oil exporting country with respect to the effects of subcomponents of country risk we find evidence that economic and political risk have a significant impact on supply side shocks in net oil exporting countries like canada while economic and political risk have a significant effect on supply side shocks and oil specific demand shocks in net oil importing countries like the us these results are particularly important to policy makers and government

exploratory assessment of the economic gains of a pre salt oil field in brazil abstract in recent years brazil has made public several oil discoveries located in deep waters below the salt layer discoveries are steadily enhancing national reserves and have brought the country into a new role in the global oil industry this paper aims at investigating the economic gains that could be expected from a brazilian oil field in the pre salt region analyses were conducted based on the libra field the largest oil discovery in brazil until now with approximately 10 billion barrels the results were calculated for different scenarios of oil prices companies arrangements and regulatory regimes the findings suggest that economic gains could be higher for the brazilian government if the oil production were conducted under a service contract scheme however considering the current production sharing regime in force for pre salt areas economic gains could be higher if a bidding process was conducted ensuring for the brazilian government a higher participation in the oil to be produced additionally the results demonstrate that under the current rules applied for the production sharing regime the government quota of oil has decreased over time putting at risk economic results

financial development and openness evidence from panel data abstract this paper addresses the empirical question of whether trade and financial openness can help explain the recent pace in financial development as well as its variation across countries in recent years utilising annual data from developing and industrialised countries and dynamic panel estimation techniques we provide evidence which suggests that both types of openness are statistically significant determinants of banking sector development our findings reveal that the marginal effects of trade financial openness are negatively related to the degree of financial trade openness indicating that relatively closed economies stand to benefit most from opening up their trade and or capital accounts although these economies may be able to accomplish more by taking steps to open both their trade and capital accounts opening up one without the other could still generate gains in terms of banking sector development thus our findings provide only partial support to the well known rajan and zingales hypothesis which stipulates that both types of openness are necessary for financial development to take place