Search results

In the early 1930s, Nicholas Kaldor could be classified as an Austrian economist. The author reconstructs the intertwined paths of Kaldor and Friedrich A. Hayek to disequilibrium economics through the theoretical deficiencies exposed by the Austrian theory of capital and its consequences on equilibrium analysis.

The author approaches the discussion using a theoretical and historical reconstruction based on published and unpublished materials.

The integration of capital theory into a business cycle theory by the Austrians and its shortcomings – e.g. criticized by Piero Sraffa and Gunnar Myrdal – called attention to the limitation of the theoretical apparatus of equilibrium analysis in dynamic contexts. This was a central element to Kaldor’s emancipation in 1934 and his subsequent conversion to John Maynard Keynes’ The General Theory of Employment, Interest, and Money (1936). In addition, it was pivotal to Hayek’s reformulation of equilibrium as a social coordination problem in “Economics and Knowledge” (1937). It also had implications for Kaldor’s mature developments, such as the construction of the post-Keynesian models of growth and distribution, the Cambridge capital controversy, and his critique of neoclassical equilibrium economics.

The close encounter between Kaldor and Hayek in the early 1930s, the developments during that decade and its mature consequences are unexplored in the secondary literature. The author attempts to construct a coherent historical narrative that integrates many intertwined elements and personas (e.g. the reception of Knut Wicksell in the English-speaking world; Piero Sraffa’s critique of Hayek; Gunnar Myrdal’s critique of Wicksell, Hayek, and Keynes; the Hayek-Knight-Kaldor debate; the Kaldor-Hayek debate, etc.) that were not connected until now by previous commentators.

This study aims to model scale effects in nano-beams under torsion.

The elastostatic problem of a nano-beam is formulated by a novel stress-driven nonlocal approach.

Unlike the standard strain-driven nonlocal methodology, the proposed stress-driven nonlocal model is mathematically and mechanically consistent. The contributed results are useful for the design of modern devices at nanoscale.

The innovative stress-driven integral nonlocal model, recently proposed in literature for inflected nano-beams, is formulated in the present submission to study size-dependent torsional behavior of nano-beams.

We explore the impact of equity liquidity on a firm’s dynamic leverage adjustments and the moderating impacts of leverage deviation and target instability on the link between equity liquidity and dynamic leverage in the UK market.

In applying the two-step system GMM, we estimate our model by exploring suitable instruments for the dynamic variable(s), i.e. lagged values of the dynamic term(s).

Our analyses document that a firm’s equity liquidity has a positive impact on the speed of adjustment (SOA) of its leverage ratio back to the target ratio in the UK market. We also demonstrate that the positive relationship between liquidity and SOA is more pronounced for firms whose current position is relatively close to their target leverage ratio and whose target ratio is relatively stable.

This study provides important implications for both firms’ managers and investors. Particularly, firms’ managers who wish to increase the leverage SOA to enhance firms’ value need to give great attention to their equity liquidity. Investors who want to evaluate firms’ performance could also consider their equity liquidity and leverage SOA.

We are the first to enrich the literature on leverage adjustments by identifying equity liquidity as a new determinant of SOA in a single developed country with many differences in the structure and development of capital markets, ownership concentration and institutional characteristics. We also provide new empirical evidence of the joint effect of equity liquidity, leverage deviation and target instability on leverage SOA.

This paper examines the impact of political instability on the investors' behavior, measured by Google search queries, and on the dynamics of stock market returns.

First, by using the DCC-GARCH model, the authors examine the effect of investor sentiment on the Tunisian stock market return. Second, the authors employ the fully modified dynamic ordinary least square method (FMOL) to estimate the long-term relationship between investor sentiment and Tunisian stock market return. Finally, the authors use the wavelet coherence model to test the co-movement between investor sentiment measured by Google Trends and Tunisian stock market return.

Using the dynamic conditional correlation (DCC), the authors find that Google search queries index has the ability to reflect political events especially the Tunisian revolution. In addition, empirical results of fully modified ordinary least square (FMOLS) method reveal that Google search queries index has a slightly higher effect on Tunindex return after the Tunisian revolution than before this revolution. Furthermore, by employing wavelet coherence model, the authors find strong comovement between Google search queries index and return index during the period of the Tunisian revolution political instability. Moreover, in the frequency domain, strong coherence can be found in less than four months and in 16–32 months during the Tunisian revolution which show that the Google search queries measure was leading over Tunindex return. In fact, wavelet coherence analysis confirms the result of DCC that Google search queries index has the ability to detect the behavior of Tunisian investors especially during the period of political instability.

This study provides empirical evidence to portfolio managers that may use Google search queries index as a robust measure of investor's sentiment to select a suitable investment and to make an optimal investments decisions.

The important research question of how political instability affects stock market dynamics has been neglected by scholars. This paper attempts principally to fill this void by investigating the time-varying interactions between market returns, volatility and Google search based index, especially during Tunisian revolution.

The international trade literature has established that export product diversification lowers export product revenue instability. The current analysis investigates whether this finding carries over services exports.

The empirical analysis covers a sample of 152 countries over the period 1980–2014 and employs the two-step system generalized method of moments (GMM) approach.

The empirical findings indicate that services export diversification reduces services export revenue instability both over the full sample as well as over sub-samples of high-income countries (HICs), least developed countries (LDCs) as well as developing countries (i.e. non-HICs) that are not LDCs. HICs appear to experience a higher positive effect of services export diversification on services export revenue instability than in developing countries. The analysis also shows that countries that further open-up to international trade enjoy a greater reducing effect of services export diversification on the instability of services export revenue.

This analysis, therefore, adds to the existing studies on the relationship between export product diversification and the instability of revenue derived from goods exports by focusing on the services export side. An important message from the analysis is that countries that diversify their services export basket enjoy lower services export revenue instability when they further integrate into the world trade market.

This study highlights the importance of services export diversification, including for stabilizing services export revenue to services traders. Diversifying services export items, including across traditional and modern services sectors involves the implementation of a wide range of policies and measures, of which the liberalization of the services sectors through reduction and eventually the elimination of services trade barriers; the improvement of the business environment and the development of domestic financial markets (see for example, Hoekman, 2017). It could be interesting that another study consider policies and measures that could promote services export diversification.

To the best of the authors’ knowledge, this is the first time this topic is being addressed, including empirically.

In this research, we examine the role of financial development, FDI, democracy and political instability on economic growth in West Africa.

The study uses the dynamic fixed effects technique on the secondary data obtained from 1996 to 2016.

Our empirical findings suggest that even though no significant relationship is established in the short run, the long-run coefficient of FDI is found to be significant and positive; a 1% increase in FDI inflow into the West African sub-region results in a 0.26% increase in economic growth. The coefficient of democracy is significant neither in the short run nor in the long run, but political instability is found to significantly and negatively impact the growth of the countries. Finally, the estimate of financial development–growth nexus follows the supply-leading hypothesis.

This research affirms the proposition that FDI is a relevant means of technology and knowledge transfers, thus resulting in increasing returns to production as a result of productive spillovers, which drives the growth of the economy. Consequently, an efficient institution – where the rule of law, political stability and economic freedom are top priorities – is a key to accelerate the growth of the West African economy. Similarly, we confirm the validity of the supply-leading hypothesis in West Africa. As such, by deepening the financial system, the growth of the subregion is propelled because an efficient financial system is a basis for sustainable development.

The applicable policies are those that promote growth through FDI, financial development, democracy and political instability. The governments of West African countries are enjoined to promote policies that attract FDI into the subregion and promote financial sector credits so that economic performances may be enhanced. In addition, the governments of West African subregion should fully entrench democratic practices and enhance a stable and sustainable political environment. This will not only restore investor confidence but will also facilitate the inflow of FDI into the West African economy.

Our study is the first to jointly examine these important growth determinants, especially in the context of West Africa. This becomes necessary in order to open the eyes of policy makers to the need for entrenched full democracy and to proffer sustainable cures to the frequent unrests in the subregion. The use of Pesaran (2007) technique of unit root is also a deviation from several existing studies. One advantage of this technique over others is that being a second-generation test, it tests variable unit root in the presence of cross-sectional dependence.

This paper aims to explore the effect of non-resource tax revenue instability on non-resource tax revenue in developed and developing countries.

The analysis has used an unbalanced panel data set of 146 countries over the period 1981–2016, as well as the two-step system generalized methods of moment approach.

The empirical analysis has suggested that non-resource tax revenue instability influences negatively non-resource tax revenue share of gross domestic product. The magnitude of this negative effect is higher in less developed countries than in relatively advanced countries. This negative effect materializes through public expenditure instability: non-resource tax revenue instability exerts a higher effect on non-resource tax revenue share as the degree of public expenditure instability increases. Finally, non-resource tax revenue instability exerts a higher negative effect on non-resource tax revenue share as economic growth volatility rises, inflation volatility increases and terms of trade instability increases.

The main policy implication of this analysis is that policies that help ensure the stability of non-resource tax revenue also contribute to improving countries’ non-resource tax revenue share. For example, governments’ measures that help cope with or prevent the severe adverse effects of shocks on economies (shocks that could translate into higher tax revenue instability) would ultimately help enhance countries’ tax revenue performance.

The severity of the current COVID-19 pandemic shock (which is a supply and demand shock) and the macroeconomic uncertainty that it has generated – inter alia, in terms of economic growth instability, terms of trade instability, inflation volatility and public expenditure instability – are likely to result in severe tax revenue losses. Governments in both developed and developing countries would surely learn from the management of this crisis so as to prepare for possible future economic, financial and health crises with a view to dampening their adverse macroeconomic effects, including here their negative tax revenue effects.

To the best of the author’s knowledge, this topic is being addressed in the empirical literature for the first time.

This study investigates the extent to which, and in what ways and capacities, the incidence of adverse economic conditions burdening the masses, on the macro-level, increases the propensity for the generation of political instability/violence.

Drawing on data from a cross-section of 25 Sub-Saharan African (SSA) countries for the period 2005–2019, fixed effects (FE) and generalized method of moments (GMM) estimations are used to determine the nature and significance of the independent variable (economic condition), complemented by three control variables, on the dependent WGI-defined variable political stability scored on the basis of a continuum from −2.5 (most unstable) to +2.5 (most stable). For the link between political instability and socioeconomic conditions, the study employs a construct derived from frustration-aggression and relative deprivation theory.

The study links socioeconomic adversity to political instability in the context of SSA. In addition, larger populated countries exhibit a greater propensity to political instability than smaller populated countries. In contrast, foreign direct investment (FDI) appears to have no real effect, positive or negative, on political stability.

Poor living conditions seem to be strongly associated with a high risk of political violence in SSA. To buoy socioeconomic status, poverty alleviation needs be elevated into a key initiative in the decision-making agenda, at all levels of governance, with real targeted strides achieved in terms of enhancement of the standard of living of the masses. In addition, policies that control population need to be inaugurated hand-in-hand with welfare measures and a more equitable balancing of the distribution of resources in the society.

Given the high regional incidence of civil strife and violence, combined with a dearth of research of an empirical nature on political risk in SSA, this study provides a largely ignored and useful context on SSA apart from studies on the incidence of violence that consider the developing countries as a monolithic whole.