Some evidence on the continuity of the growth process among the G7 countries

The stability of the growth process, whether growth rates are rising, falling, or constant, is one of the central questions of economic growth theory. We use recently developed techniques for identifying structural change in economic time series, and find evidence of multiple breaks in per capita real GDP of the G7 countries over the past 120 years. Once determined, these breaks are used to delineate time periods. Although there is some evidence of individual periods of slowdowns, the overall tendency appears to be one of increasing steady state growth over the long run.     

Economic Transition and Regional Growth: The Case of Albania and Comparator SEECs

The focus of this paper is to investigate the growth performance of Albania and other South Eastern European Countries in the period 1990–2006 by examining traditional growth sources as emerge from standard theoretical models. It focuses on macroeconomic performances and GDP per capita growth rates to examine why countries in the SEE region are lagging behind with respect to other transition economies. The analysis is conducted through stylised growth regressions to estimate convergence rates and coefficients of key factors of growth. Results indicate that real GDP growth in all the eight countries is mainly driven by physical capital accumulation, whereas the contribution of human capital is insignificant or even negative.     

Liberalization, FDI, and Growth in Developing Countries: A Panel Cointegration Approach

Using a panel cointegration framework, the article explores the two-way link between FDI and growth for a panel of 23 developing countries. In addition, it investigates the impact of liberalization on the dynamics of the FDI and GDP relationship. A long-run cointegrating relationship is found between FDI and GDP after allowing for heterogeneous country effects. The cointegrating vectors reveal a bidirectional causality between GDP and FDI for more open economies. For relatively closed economies, long-run causality appears unidirectional and runs from GDP to FDI, implying that growth and FDI are not mutually reinforcing under restrictive trade and investment regimes.     

Does Remittance Outflow Stimulate or Retard Economic Growth?

This article evaluates the association between remittance outflow (RMO) and economic growth in the Gulf Cooperation Council (GCC) countries. The results of this evaluation indicate that RMO Granger creates gross domestic product (GDP) per capita in three countries, namely, Bahrain, Oman and Saudi Arabia. Similarly, the results for causality from GDP per capita to RMO are significant for four countries, namely, Bahrain, Kuwait, Qatar, and Saudi Arabia. The findings differ from those of the household consumption model, stating that higher RMO will decrease economic activity. GDP per capita is the main determinant of RMO, suggesting that economic growth promises and encourages continuous RMO and vice versa. The adverse impact of RMO can be minimized by encouraging the local population to be productive in the private sector, as local productivity will reduce the huge influx of foreign workers and provide valuable local investment opportunities to lessen the amount being remitted.     

NONLINEAR BUSINESS CYCLE DYNAMICS: CROSS-COUNTRY EVIDENCE ON THE PERSISTENCE OF AGGREGATE SHOCKS

We look for asymmetries in the dynamics of real GDP growth for the G7 countries, using a model by Beaudry and Koop that allows the depth of a recession to influence the rate of growth of output. We find evidence supporting these nonlinearities in four countries, including the United States, but we do not find evidence that the asymmetries are common even among the four countries exhibiting asymmetric behavior. A modification of the model to distinguish between the recession and recovery phases of a business cycle does not change this general finding. The asymmetries discovered by Beaudry and Koop do not appear to be common among the G7 nations. (JEL E32)     

The Rapid Rise of Supermarkets?

A series of articles, many of them published in this journal, have charted the rapid spread of supermarkets in developing and middle‐income countries and forecast its continuation. In this article, the level of supermarket penetration (share of the retail food market) is modelled quantitatively on a cross‐section of 42 countries for which data could be obtained, representing all stages of development. GDP per capita, income distribution, urbanisation, female labour force participation and openness to inward foreign investment are all significant explanators. Projections to 2015 suggest significant but not explosive further penetration; increased openness and GDP growth are the most significant factors.     

Growth Patterns in the CIS-8: A Political Economy Approach

On the whole GDP growth is usually considered robust in the CIS-8. However, there are remarkable differences in the quality of growth performances between the countries in the region. These differences cast doubts on the sustainability of the recent growth performance in some Caspian/Caucasian countries. This paper tries to develop a basic understanding of the different qualities of growth performance other than GDP growth rates. Therefore, we distinguish between volume-driven and efficiency-driven growth. Taking into account different resource endowments, we identify different patterns of physical capital accumulation and development of Total Factor Productivity (TFP) growth. The results of our fixed effects model indicate that governance has a significant positive effect on TFP and GDP per capita growth, whereas our results for regime type indicate a non-linear relationship. Therefore, we conclude that institutional quality seems to be the major determinant causing efficiency-driven growth and is thus of major importance when assessing the sustainability of growth paths in the region.     

Agricultural Exports and Food Insecurity in Sub‐Saharan Africa: A Qualititative Configurational Analysis

Export of agricultural products is increasingly seen as one of the few viable instruments to solve the problem of food insecurity in developing countries. Using the configurative comparative method to study 17 countries in sub‐Saharan Africa, this article argues that increasing agricultural export is only beneficial for certain types of developing countries. Before agricultural exports are encouraged, food availability, agricultural labour productivity, the share of agriculture in total GDP, the amount of staple food imports, and the share of investment goods in total imports should be considered.     

Economic welfare,civil liberty,and suicide: an empirical investigation

Performing an international cross-section study for 30 countries, this paper investigates the dependence of suicides rates on real income per capita, real income growth and civil liberty. Suicide rates are transformed into logits, and weighted seemingly unrelated Zellner–Aitken estimates are obtained for both sexes and seven age groups, where the weights correspond to the size of the population in each of the subgroups of the different countries. All three variables have significant effects on the suicide rate. The economic variables have a positive influence: the higher real per capita income and/or real economic growth, the higher the suicide rate is. But these results vary between age groups: income plays a more important role for the middle age group, whereas economic growth is more important for the older people. Moreover, older women react stronger to income growth than older men. With respect to civil liberty, we get ‘expected’ results: the more liberty, the lower the suicide rates.     

Public Debt Sustainability in Africa: Building Resilience and Challenges Ahead

The increased access of African countries to international capital markets has put public debt sustainability at the forefront of the continent's policy agenda. Utilising the ‘stabilising primary‐balance’ approach, this article finds that the actual primary balances exceeded those required to keep public debt at the 2007 level in about half the countries studied, and in several cases, those needed to reduce public debt‐to‐GDP to sustainable thresholds. The interest rate‐growth differential (IRGD) drove sustainability, underscoring the importance of growth and borrowing for growth‐enhancing outlays. As the IRGDs are likely to narrow over the longer term, fiscal policies will need to play a greater role.     

Measuring the Quality of Bank Regulation and Supervision with an Application to Transition Economies

This study develops a methodology to evaluate the quality of the legal aspect of bank regulation and supervision (RS). We use both the Basle guidelines and the letter of banking laws to form an extensive set of criteria to evaluate banking laws. As an application, we provide measures of RS for 23 transition economies. Our measurements indicate that legal banking reforms in Poland, Hungary, and Estonia have been more ambitious than the rest of the countries in transition. Controlling for various other relevant factors, empirical evidence reveals a significant positive relationship between RS and real GDP growth in transition economies.     

Aid and Fiscal Deficits: Lessons from Uganda on the Implications for Macroeconomic Management and Fiscal Sustainability

This article contributes to the ongoing debate on the macroeconomic management of large aid inflows to low‐income countries by analysing lessons drawn from Uganda, where the fiscal deficit before grants, which was largely aid‐funded, doubled to over 12% of GDP in the early 2000s. It focuses on the implications of the widening fiscal deficit for monetary policy, the real exchange rate, debt sustainability and the vulnerability of the budget to fiscal shocks, and argues that large fiscal deficits, even when funded predominantly by aid, risk undermining macroeconomic objectives and long‐run fiscal sustainability.     

What drives youth unemployment in Europe? Economic vs non‐economic determinants

This article explores the main determinants of youth unemployment in Europe in the period 2002 to 2014 by estimating panel data models for the 28 Member States of the European Union (EU). Heterogeneity is acknowledged by estimating models for subsamples of countries with “high” and “low” youth unemployment rates. The main results suggest that youth unemployment is more pronounced in countries with poor GDP growth, a low share of construction activity and high public debt. Reduced mobility (owing to homeownership), corruption, reception of a high level of remittances and a lack of possibilities for young people to live outside parental homes are also important factors.     

DO PRICES LEAD MONEY? A REEXAMINATION OF THE NEUTRALITY HYPOTHESIS

In one class of theoretical models, real epects occur only if changes in money growth are expected to occur in some future period, if expected in the current period, they are neutral. Some empirical models examine the neutrality of expected current money growth and therefore do not directly address the neutrality of expected future growth. This paper develops an empirical model that explicitly incorporates expected future changes in money growth. A reexamination of the rationality, neutrality, and macro-rational expectations hypotheses over a sample of four countries suggests that the use of expected future money growth results in strong rejections of the neutrality hypothesis.     

Are Shocks to Real Output Permanent or Transitory? Evidence from a Panel of “Asean” Per Capita GDP Data

Since economic theory provides reasons for nonlinearity in economic variables due to frictions/distortions in the economy, the use of linear unit root tests to examine the nonstationary properties of per-capita GDP (PCGDP) may provide misleading results. With this background we have analyzed the mean reversion properties of per capita real GDP of Association of South East Asian Nations (ASEAN) countries (for the period 1950–2010) using the recently developed Ucar and Omaga (Econ Lett 104:5–8, 2009) nonlinear panel unit root test. The results indicate that the PCGDP of ASEAN countries are nonlinear process and are stationary.     

Anomie Among European Adolescents: Conceptual and Empirical Clarification of a Multilevel Sociological Concept1

Anomie is a complex, dynamic concept that refers simultaneously to a social state and an individual state of mind. Generations of sociologists have attempted to clarify, extend, and measure the concept at various levels of analysis. This article summarizes these developments around the twin concepts of exteriority and constraint. Exteriority refers to experiencing the social world as an objective, predictable reality, while constraint refers to the extent to which one experiences a personal commitment to the demands and expectations of society. The Anomie Scale of Exteriority and Constraint (ASEC) is presented and tested across various psychological and social outcomes among adolescents in 18 European countries. Exteriority is found to be primarily associated with more depression and less self‐esteem, while constraint is associated with a lower probability of daily smoking, illicit drug use, truancy, and suicide attempts. Societal anomie is higher in eastern European countries and it has a strong negative correlation with GDP per capita and a marginally positive correlation with GDP growth. Societal anomie is also associated with higher baseline levels of depression, self‐esteem, and illicit drug use. These results lend strong support to the theoretical construct of anomie as exteriority and constraint.     

Does the sectoral composition of growth affect child stunting reductions?

This article uses a natural experiment based on random and exogenous variations in temperature to examine whether the sectoral composition of growth has an effect on child stunting reductions. Agricultural growth is central to food security strategies in developing countries, as it is often considered the most effective way to fight (child) undernutrition. The evidence base to support the putative superior role of agricultural growth is, however, relatively weak, possibly because studies have ignored growth faltering. Accounting for the latter, we find that while both agricultural and non‐agricultural growth decrease stunting, agricultural growth is significantly superior to non‐agricultural growth in this regard. The estimated impacts are large, in that a 10% increase in agricultural GDP per capita reduces child stunting by 9.6% (as opposed to 8.4% for non‐agricultural).     

Main Determinants of Foreign Direct Investment in the Southeast European Countries

The growth of foreign direct investments (FDI) in the world has been significant in recent years. Between 1990 and 2000 worldwide FDI inflows increased more than five times, and since 2000 they have declined. During the period of FDI expansion, growth was especially strong from 1997 onward. However, most of the FDI transactions were between the developed countries. The distribution of FDI is unequal and less-developing countries face difficulties in attracting FDI. Despite the fact that FDI is increasingly important to developing countries, over the past few years the share of the developing countries in worldwide FDI inflows has been declining. The paper analyses geographical and sector distribution of FDI in the Southeast European countries (SEEC) and compares its amount with that in Central East European countries. According to economic theory, FDI towards developing countries flows for labor-intensive and low-technology production, while towards developed states, it flows for high-technology production. Identification of determining factors of FDI is a complex problem which depends on several characteristics specific for each country, sectors, and companies. All those factors could be grouped in three broad categories: economic policy of host country, economic performance, and attractiveness of national economy. On the desegregated level, FDI depends on size and growth potential of a national economy, natural resources endowments and quality of workforce, openness to international trade and access to international markets, and quality of physical, financial, and technological infrastructure. An important question is how SEEC can attract more foreign investment. To find the answer, this paper uses data on FDI inflows to SEEC to determine the main host country determinants of FDI and provides regression-based estimation of determinants of FDI. Using a sample of SEEC and panel data techniques, the determinants of FDI in this part of Europe are investigated. The paper researches the relationship between FDI, GDP, GDP per capita, number of inhabitants, trade openness, inflation, external debt, and information and communication technology sectors. For SEEC, FDI inflows are largely dependent on the completion of the privatization process and in this paper we include the level of private sector and privatization as explanatory variables. Our findings suggest that certain variables such as privatization and trade regime, as well as the density of infrastructure, appear to be robust under different specifications. A positive significance of the agglomeration factor is also observed, confirming the relevant theoretical propositions. However, certain differential variables, such as the privatization, could not be fully captured due to the statistical homogeneity of the sample.     

The Russian Economy and the Oil Price: A Co-integrated VAR Approach

Using a co-integrated VAR model, this paper analyzes the dynamic effects of oil price and interest rate shocks on the Russian economy for the period 1995:Q1-2008:Q2. The co-integration analysis leads to the finding that a 1% increase in oil prices contributes to real GDP growth by 0.8%, suggesting an increase four times that reported by Rautava (2002), in the long run. Furthermore, the impulse response analysis suggests that the impacts of the shock on inflation and real GDP are positive over the next eight quarters (short run), whereas the tightening of monetary policy through interest rate channel is immediately associated with a decline in inflation as predicted by theory, but with an increase in real GDP over the preceding quarters.      

The Anticipated Effects of EU Enlargement: Exchange Rate Volatility,Institutions and Conditional Convergence

Improvement of economic policies and institutions and reduced exchange rate volatility are two expected effects arising when candidates develop prerequisites needed to qualify for EU membership. In this paper, we evaluate whether these two effects occurred in the Eastern European accession countries by inspecting exchange rate volatility and the evolution of different indicators of the quality of institutions before and after the start of the negotiation period. We then evaluate the impact of both effects on growth of real per capita GDP. By comparing the effects on accession countries to a group of control countries, including transition non candidates, we find that the prospect of accession has a significant effect on output growth, which starts materializing much before accession and even before the beginning of the negotiations with the EU.

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