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1 – 10 of over 101000Using data for a sample of advanced and developing countries, this paper aims to study the responses of monetary growth and the growth of government spending to external…
Abstract
Purpose
Using data for a sample of advanced and developing countries, this paper aims to study the responses of monetary growth and the growth of government spending to external spillovers, namely, the growth of exports and imports, movement in the real effective exchange rate and the change in the oil price. The objective is to study movements in domestic policy variables in open economies that are vulnerable to trade and commodity price shocks.
Design/methodology/approach
The analysis evaluates correlations between the responses of the policy variables to external spillovers. Further, the analysis studies the effects of indicators of economic performance on domestic policy responses to various shifts across countries.
Findings
Higher variability of real and nominal growth increases the fiscal policy response to external spillovers with an aim to stem further variability. Monetary policies appear to be more responsive to trend price inflation with an aim to stem further inflationary pressures. Fiscal policy’s reaction to trend price inflation aims at striking a balance between countering potential inflationary pressures, as well as recessionary conditions attributed to the various spillovers.
Originality/value
Overall, the evidence points to the importance of trade and commodity price shifts to the design of domestic policies. Further indicators of economic performance differentiate the degree of policy responses to trade and commodity price developments with a goal to stem inflationary pressures and reduce aggregate uncertainty.
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More and more statistics have repeatedly shown that as the economic development has entered the New Normal, the Chinese fiscal system has experienced tremendous changes. Although…
Abstract
Purpose
More and more statistics have repeatedly shown that as the economic development has entered the New Normal, the Chinese fiscal system has experienced tremendous changes. Although chance cannot be ruled out, much of those changes indicate trends, and they can even be said to be the result of the law of economic development. These trends and changes have repeatedly demonstrated that, as a reflection and an inevitable result of the economic developing speed shift, structural adjustment and energy conversion, the Chinese fiscal system, far from the conventional operating state, has progressed on a new path. The paper aims to discuss this issue.
Design/methodology/approach
This paper systematically analyzes several new trends and changes in the Chinese fiscal system under the New Normal. First, revenue growth has experienced a sharp downward trend, while the tax elasticity coefficient has declined rapidly. Second, fiscal expenditure has risen against the tendency, while the rigidity of expenditure has kept on increasing.
Findings
Considering the present fiscal and taxation system reform with the analysis above, it can be seen that if the reform’s progress for the past two years is slower than expected – thus, preventing the effects of all aspects from a timely achievement – then, in the recent period, the agreement on the fiscal and taxation system reform will be reached and challenges entirely different from the past, including sharp slowdown in revenue growth rate, fiscal expenditure rising against trend and increases in fiscal deficit and government debts will be faced. The factors encouraging the reform are gathering gradually. The growth of the strength to push the reform forward is speeding up. And the pace of the reform in relevant areas is quickening.
Originality/value
In the face of those trends and changes, on the one hand, the authors should deeply understand and accurately grasp them through a comprehensive summary and systematic analysis. On the other hand, a series of conventional ideas, thoughts and strategies should be adjusted comprehensively and duly. Taking a train of new ideas, thoughts and strategies, the authors ought to actively adapt to and initiate a new Chinese fiscal structure under the New Normal of China’s economy.
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In the 1970s, yields on UK commercial investment property appear to have been influenced principally by the cost of long term capital and the rate of rental growth. Consequently…
Abstract
In the 1970s, yields on UK commercial investment property appear to have been influenced principally by the cost of long term capital and the rate of rental growth. Consequently, yields tended to respond to the economic cycle, falling in times of economic recovery and rising when the economy moved into recession. However, in the 1980s so far, yield trends appear anomalous by comparison. Yields failed to rise on the advent of the recession in 1980–81, despite a sharp rise in the cost of capital, yet rose in 1982 just when the economy began to emerge from recession, and have since continued to rise as economic recovery and rental growth have gathered pace. This paper seeks to explain recent movements in investment property yields and to reconcile these with trends in the 1970s. It concludes that the behaviour of yields in the 1980s can be explained by the dominance of institutional investors in the property market, and by their perception of the changing risk attributes of property (compared with alternative investments) which have resulted from changes taking place in the investment markets and the UK economy.
Dmitrij Celov and Mariarosaria Comunale
Recently, star variables and the post-crisis nature of cyclical fluctuations have attracted a great deal of interest. In this chapter, the authors investigate different methods of…
Abstract
Recently, star variables and the post-crisis nature of cyclical fluctuations have attracted a great deal of interest. In this chapter, the authors investigate different methods of assessing business cycles (BCs) for the European Union in general and the euro area in particular. First, the authors conduct a Monte Carlo (MC) experiment using a broad spectrum of univariate trend-cycle decomposition methods. The simulation aims to examine the ability of the analysed methods to find the observed simulated cycle with structural properties similar to actual macroeconomic data. For the simulation, the authors used the structural model’s parameters calibrated to the euro area’s real gross domestic product (GDP) and unemployment rate. The simulation outcomes indicate the sufficient composition of the suite of models (SoM) consisting of popular Hodrick–Prescott, Christiano–Fitzgerald and structural trend-cycle-seasonal filters, then used for the real application. The authors find that: (i) there is a high level of model uncertainty in comparing the estimates; (ii) growth rate (acceleration) cycles have often the worst performances, but they could be useful as early-warning predictors of turning points in growth and BCs; and (iii) the best-performing MC approaches provide a reasonable combination as the SoM. When swings last less time and/or are smaller, it is easier to pick a good alternative method to the suite to capture the BC for real GDP. Second, the authors estimate the BCs for real GDP and unemployment data varying from 1995Q1 to 2020Q4 (GDP) or 2020Q3 (unemployment), ending up with 28 cycles per country. This analysis also confirms that the BCs of euro area members are quite synchronized with the aggregate euro area. Some major differences can be found, however, especially in the case of periphery and new member states, with the latter improving in terms of coherency after the global financial crisis. The German cycles are among the cyclical movements least synchronized with the aggregate euro area.
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Manzoor Hassan Malik and Nirmala Velan
The purpose of this paper is to present the growth trends in IT industry after the period of globalization in 1990s and to investigate the short-run and long-run dynamics between…
Abstract
Purpose
The purpose of this paper is to present the growth trends in IT industry after the period of globalization in 1990s and to investigate the short-run and long-run dynamics between IT software and service exports, globalization and economic growth in India.
Design/methodology/approach
Annual time series data on IT exports, net national product and openness index have been collected from National Association of Software and Service Companies, the Reserve Bank of India database on Indian economy and the World Bank for the present study. The methodology adopted for studying the first objective are growth trend models, descriptive statistics and graphs prepared on the basis of data from the IT sector. Growth trends in key performance variables, such as total output, export, domestic output and employment have been analyzed. In the case of second objective, vector auto regression model has been used based on variance decomposition and impulse response function to capture the short-run and long-run dynamics between IT exports, globalization and economic growth in India.
Findings
Results of the growth trend model show the relative growth performance of software services receipts shows its strong advancement compared to the other sub-components of current account of balance of payments of India. It is found that economic growth responds positively to the shocks in IT exports and openness of economy. Further, IT software and service exports and openness index contribute to economic growth more in the long-run rather than in the short run.
Research limitations/implications
The IT software and service exports is dynamic field of economic activity amid heavy dependence on both domestic and external economic and political environment; hence, the rate of change is so rapid, and the relevance of factors may change over time.
Practical implications
The paper has implications for achieving sustainability in IT software and service exports growth. It is recommended that economic growth can be enhanced by implementing policies that not only improve the efficiency of the sector but also focus on optimization of the potential of the Indian IT industry.
Originality/value
This paper focuses on originality in delineating the growth trends and analysis of capturing the short-run and long-run dynamics between IT exports, globalization and economic growth in India.
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Zoe Laulederkind and James Peoples
This chapter investigates productivity and cost patterns in the all-cargo US air transport sector. We empirically test the productivity growth influence of changes in unexplained…
Abstract
This chapter investigates productivity and cost patterns in the all-cargo US air transport sector. We empirically test the productivity growth influence of changes in unexplained technology, air operations movement characteristics, and factor input prices. Findings show productivity trends depicting negative growth for the 1993–2001 sample, then shifting measurably such that productivity trends depict positive growth for the 2002–2014 sample. The post 2001 growth was fueled by changes in unexplained technological advancements. We interpret this finding as an indication of the importance of technological innovation as a performance enhancer in this transport sector. Findings also reveal a lack of productivity change associated with changes in input prices and movement characteristics. We interpret input price findings as indicating increases in factor input prices such as wages and fuel prices are commensurate with enhanced labor and fuel productivity. The movement characteristic findings are attributable to a lack of sustained increases in load factors, stage length, network size and carrying more volume over the network (density).
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Channing Arndt, Sam Jones and Finn Tarp
We consider the relationship between external aid and development in Mozambique from 1980–2004, identifying the specific mechanisms through which aid has influenced the…
Abstract
We consider the relationship between external aid and development in Mozambique from 1980–2004, identifying the specific mechanisms through which aid has influenced the developmental trajectory of the country. We undertake both a growth accounting analysis and review the intended and unintended effects of aid at the micro-level. Sustained aid flows to Mozambique, in conflict and post-conflict periods, have made an unambiguous, positive contribution to rapid growth since 1992. However, proliferation of donors and aid-supported interventions has burdened local administration, indicating a need for deeper domestic government accountability. To sustain growth, Mozambique must maximize benefits from natural resources while promoting constructive international market integration.
The trends of growth in total product in Ceara and in each economic sector are shown in Table 1. For the sake of simplicity, we call “agriculture” all crop and cattle or fishing…
Abstract
The trends of growth in total product in Ceara and in each economic sector are shown in Table 1. For the sake of simplicity, we call “agriculture” all crop and cattle or fishing activities; “industry” includes manufacturing, construction, and utilities; and “services” includes all kinds of services, including private and public, economic services, and social services.
Thomas D. Willett, Priscilla Liang and Nan Zhang
This chapter argues that there are a number of different versions of decoupling hypotheses and that rapid swings in their popularity are due largely to herding in popular mental…
Abstract
This chapter argues that there are a number of different versions of decoupling hypotheses and that rapid swings in their popularity are due largely to herding in popular mental models and shifts in short-run correlations. It is important to not put too much emphasis on such changes of correlations since these can vary substantially depending on the patterns of shocks. There are substantial differences in the effects of contagion during the current crisis on growth rates of both advanced and emerging economies, including Brazil, Russia, India, and China (the BRICs). Our estimates suggest that while countries like China and India have been able to maintain high growth rates, their short falls from trends have not been greatly smaller than for the United States itself. Thus, their decoupling has not been as great as many popular analyses have suggested.
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