Macroeconomic consequences of terrorism in Pakistan

The objective of the study examines the macroeconomic consequences of terrorism in Pakistan. The study evaluates the short- and long-run relationship between terrorism and economic factors over a period of 1975–2011. Both objectives have been achieved with the sophisticated econometrics techniques including cointegration theory, Granger causality test and variance decomposition, etc. The result reveals that macroeconomic factors, i.e., population growth, price level, poverty and political instability cause the terrorism incidence in Pakistan. However, income inequality, unemployment and trade openness have no long-run relationship with the terrorism incidence in Pakistan. The study may conclude that, for some how, Pakistan's macroeconomic indicators have significant long-run equilibrium with terrorism incidence. The result of Granger causality indicates that except unemployment, all other macroeconomic indicators have unidirectional causality with terrorism incidence. Unemployment has a bi-directional causality with the terrorism incidence in Pakistan. The results of variance decomposition indicate that there exists statistically significant cointegration among macroeconomic factors and terrorism incidence in Pakistan. Among macroeconomic factors, changes in price level exert the largest influence on terrorism in Pakistan. Contrary, the influence of poverty seems relatively the least contribution level for changes in terrorism incidence in Pakistan.     

The macroeconomics of Italy: a regional perspective

In this contribution we show that the dualistic nature of the Italian economy has been, and still is, crucial for the design of short- and long-run macroeconomic policies, concerning unemployment, income growth and public finance.We establish the seriousness of the dualistic process of Italian regional development using several approaches. We then considered the regional nature of the Italian unemployment and show that it has profound implications for short- and long-run policies. In particular, we find that an aggregate price–unemployment relationship must be rejected. Different values of equilibrium unemployment rates for the main macro-regions of Italy are found and short-run policy implications discussed. We then consider how this heterogeneity relates to the design of growth-promoting policies.Lastly, we present evidence in favor of the importance of the missing growth of the Italian southern regions for the evolution of the Italian public finance.     

Revisiting property crime and economic conditions: An exploratory study to identify predictive indicators beyond unemployment rates

Numerous researchers have questioned the use of the unemployment rate as an explanatory factor in econometric studies which address the relationship between the economy and crime. This paper presents the findings from an exploratory study which sought to test the efficacy of the unemployment rate for predicting reported property crime rates and to identify other economic indicators which may also prove to be useful for predicting crimes with economic under tones or motives. Specifically, larceny-theft, burglary, motor vehicle theft, robbery, fraud and embezzlement. Given the exploratory nature of the study seven stepwise regressions were computed with unemployment emerging as a significant predictor for only one of the criminal offenses. Findings identified other useful economic variables, such as average wage and salary disbursements, supplemental security income receipts, the consumer price index and per capita personal income which should be considered in lieu of unemployment rates.     

Macroeconomic effects of public investment in South-East Europe

This paper provides the first cross-country study of the macroeconomic effects of public investment in South-East Europe. For these countries, we construct a unique dataset of exogenous changes in public investment and use them with Jordá (2005) local projections method to estimate their dynamic effects on the main macroeconomic aggregates, the unemployment rate and debt-to-GDP ratio. Our results show significant multiplicative effects of public investment on GDP, delivered primarily through crowding in of private investment. Our analysis confirms that public investment can be seen as a catalyst of positive spillover effects to other sectors of the economy and thus contribute to productivity growth.     

The effects of poverty on sleep problems in Sweden

Does relative poverty measured as low disposable household income or the presence of personal financial crisis affect health measured in terms of self-reported sleep problems? If so, is this effect modified by macroeconomic conditions or life changes such as unemployment experience, divorce or limiting illness, and it is buffered by social networks or coping behavior such as smoking? These questions are studied on a representative sample of employed people aged 20-65 who participated in the Survey of Living Conditions conducted by Statistics Sweden for the years 1980-1981 (7180 people) and 1986-1989 (13,376 people). The results reveal a conditional relationship between poverty and sleep problems. Among men it is modified, in particular, by previous experience of unemployment. Among women strong social networks buffers the effect but smoking aggravates it. Men's sleep was affected more by poverty and unemployment in the late 1980s than in the earlier period.     

Tunisia after the 2011’s revolution: Economic deterioration should,and could have been avoided

The political instability and social unrest in Tunisia since 2011, generated a short-term foresight of the macroeconomic management which contributed to the deterioration of the country’s macroeconomic fundamentals. The objective of this paper is to provide the policy makers with quantitative arguments showing the importance to undertake the macroeconomic stabilization and the structural reforms that improve the total factor productivity, one of the main engines of a sustained economic growth. To that end, the paper employs a financial dynamic general equilibrium model calibrated using six flow-of-funds accounts representing the Tunisian economy in 2010. In a first stage, I reproduce the main macroeconomic variables observed for the Tunisian economy over 2011–2018. In a second stage, the model is used to compare the impacts of counterfactual policy scenarios on the Tunisian macroeconomic performance. The results show that the economy could perform much better, in relation to a battery of macroeconomic indicators (economic growth, unemployment, public external and domestic debts, current account, fiscal balance) under alternative economic policies. The most insightful results are obtained under the scenario of a total factor productivity’s growth progressing at its average level of 2001–2010. Indeed, this could generate an average yearly gain in terms of GDP growth of 3.45 percentage points and a reduction of the average unemployment rate by 7 percentage points over the same time horizon.     

Measuring the economic impacts of recent oil price shocks on oil-dependent economy: evidence from Malaysia

This paper examines the economy-wide impacts of recent oil price shocks on the Malaysian economy. To achieve this objective, an integrated methodological framework that combines econometric and input–output models is utilized to assess the impacts of an oil price shock on tax revenues, employment, labor income and gross domestic product (GDP). Our results reveal that the recent oil price shocks significantly affects these macroeconomic variables. The decline in oil prices from 2015 to 2016 reduces tax revenues by 10.5%, lower GDP by 1.9% and increases the unemployment rate by 0.3%. As such, the sharp crunch in oil prices serves as a reminder to policymakers on the vulnerability inherent in overreliance on oil exports and the urgent need to diversify the economy.     

Periods and structural breaks in US economic history 1959-2007

Principal component analysis (PCA) is applied to six macroeconomic time series observed over 1959-2007. Six periods in US economic history are identified by a cluster analysis of observations in the PCA score plot. The method is data driven with no a priori information on the number or dates of breaks. Our findings give independent support to the effect of the oil price shock in 1973, and the introduction of the Great Moderation period. Of the five transition periods, two have been identified by previous studies as breaks (1973, 1984), one is a well-known date of monetary policy change (1979), and two had not previously been identified (1970, 1977-1978). In the long-run inflation and the federal funds rate are unrelated to industrial production and unemployment. Inflation and interest are positively associated as predicted by the Fisher hypothesis. These long-run relations argue against the use of monetary policy to peg the rate of unemployment or real interest rates. In the short-run inflation acts a leading indicator for unemployment for the period 1959-1997, but not for the period after 1997. The well-established reduction in macroeconomic volatility in the mid-1980s is specific to the period from 1985 to 1997; volatility subsequently rises above pre-1979 levels.     

Social income transfers and poverty: A cross‐country analysis for OECD countries

Caminada K, Goudswaard K, Koster F. Social income transfers and poverty: a cross‐country analysis for OECD countries Poverty alleviation is an important policy objective in developed welfare states. This article reports on a study of the association between social transfer policies and poverty. It has been claimed in several studies that based on a simple bivariate approach, high social effort goes along with low poverty levels. Empirical studies have also found that factors such as demographic and economic conditions may also have an influence on poverty, affecting the relationship between social spending and poverty. In the present study, we empirically analysed the impact of social expenditure on poverty for the period 1985–2005, and in contrast to previous research, demographic and macroeconomic differences across countries were controlled for. Quite a strong negative relationship was still found between the level of social expenditure and poverty. Ageing and unemployment rates were found to have some explanatory power but without affecting the association between social transfers and poverty. Thus, the multivariate approach chosen in this study confirms the results of earlier research.     

Welfare and the unemployment crisis: Sweden in the 1990s

In the 1990s Sweden went through a deep economic recession accompanied by a massive increase in unemployment and a rapidly growing budget deficit. The crisis had large repercussions for the welfare of many citizens and it generated cutbacks in virtually all social policy programmes. This halted a welfare-state expansion that had been going on for decades. It also caused great concern about the state of welfare of the nation. In 1999 the Swedish Government appointed a 'Welfare Commission', a team of academic researchers who were assigned the task of drawing up a balance sheet for the development of welfare in the 1990s. The Commission delivered its final report in October 2001. This article is a condensed account of one of the more central issues for the Commission; namely, how the unemployment crisis affected already socially and economically vulnerable groups. Looking at the development over the entire decade, three groups stand out as particularly disadvantaged in terms of individual welfare resources: young adults, immigrants and single mothers. The downturn for these groups was especially accentuated in terms of employment and income. Young people and immigrants trying to get into the labour market during the crisis years faced the problems of newcomers to the systems of social protection. The poor economic development for single mothers could essentially be attributed to the shortage of work in general and of full-time work in particular that followed from the unemployment crisis. As a consequence, the importance of selective benefits increased and the relative size of all public transfers – despite rationing measures – stayed fairly unchanged. The results highlight the great influence of macroeconomic conditions and policy making for the welfare of vulnerable groups in society.     

Universal basic income with flat tax reform in France

This article evaluates the effects of a revenue-neutral tax reform introducing a universal basic income scheme coupled with a flat income tax which replaces the existing minimum income benefit, several other conditional benefits and the existing progressive income taxation. To this aim we use a Micro–Macro simulation model for the French economy. Interestingly, our results show that the reform induces not only a significant reduction in income inequalities and poverty, but also a slightly positive effect at the macroeconomic level, implying that the equity-efficiency trade-off would not be produced.     

Structural pressures, social policy and poverty

The purpose of this article is twofold. The first aim is to examine 15 OECD countries from the point of view of the so-called third-generation studies, analysing if the development of poverty and income transfers has been uniform in countries classified under the same welfare state models. This has been done to test how appropriate it is to use welfare state models as an analytical tool in comparative welfare state research. The second aim is to examine the effect of different structural factors on poverty and income transfers. Obtained results indicate that two demographic variables studied behave somewhat differently. The share of older people in the population is – not very surprisingly – connected to an increase in income transfers. In the case of younger population groups, the results are the opposite. The results show that the greater the proportion of older people in the population, the lower the poverty rates. Social policy has in many countries consisted primarily of pension policy, and investments in the elderly population are now beginning to bear fruit. Good pension schemes diminish the immediate poverty risk of older people. As a consequence of their increased well-being, the overall poverty rate will fall. In addition to demographic factors, the results indicate that the unemployment rate is connected, on the one hand, to growth in income transfers and, on the other hand, also to increases in poverty. However, unemployment's effect on poverty is not straightforward. The direct effect is indeed an increase in poverty but, if income transfers are taken into account, the indirect effect is a decrease in poverty, since unemployment increases income transfers (unemployment benefits), which on their side alleviate poverty.     

Reducing unemployment? Examining the interplay between active labour market policies

Active labour market policies (ALMP) are important tools that welfare states utilize to influence the labour market. This study analyses the macroeconomic effects of different types of ALMP spending on aggregate unemployment rates, and especially if there is evidence of interdependencies between policies. The types of policies scrutinized are public employment services (PES), training programs, public job creation and subsidized employment, where the PES is singled out as a crucial factor that moderates the effects of other types of labour market programs. The study examines 19 welfare states between 1985 and 2013, using error correction modelling to separate between short‐ and long‐term effects. The results indicate that PES, training and subsidized employment reduce unemployment in the short‐run, whereas PES and wage subsidies are associated with reduced unemployment when considering long‐term effects. However, PES is found to have indirect effects on other policy types and increased spending on PES is shown to reinforce long‐term effects of training programs.     

Unemployment and suicide: Panel data analyses

This study uses two panel data sets for both Taiwan and other Asian countries, and employs fixed-effects models to examine the relationship between the unemployment rate and the suicide death rate. The research results in both cases indicate that the suicide death rate moves counter-cyclically with the unemployment rate. At the same time, the death rate for males, those who are older, and those with higher levels of education are relatively high. However, the higher the income, the lower will be the suicide death rate.     

Can unemployment forecasts based on Google Trends help government design better policies? An investigation based on Spain and Portugal

The Covid-19 pandemic has increased the unemployment issue and accelerated the digital transformation. Real-time data specific to ongoing revolution in applied economic analysis are increasingly demanded to anticipate changes in unemployment to improve decision-making. The aim of this paper is to test whether unemployment rate forecasts based on Google Trends data improve the predictions based only on macroeconomic indicators published with a longer time lag. The research has been carried out at the national level for Spain and Portugal, and the main novelty is the analysis of unemployment rate forecasts at the regional level for Spain using dynamic panel data models to implement the best policies to reduce unemployment. The keywords unemployment and job offers have been used in each language. The results obtained demonstrate the capacity of Google Trends data associated with unemployment to improve the predictions of unemployment rates in Spanish regions. Moreover, predictions based on Google Trends data at national level in Spain and Portugal are significantly more accurate than those based on autoregressive models for both countries.     

USING BUDGET CONSTRAINTS TO ILLUSTRATE POVERTY TRAPS: THE CASE OF YOUNG PART-TIME WORKERS IN AUSTRALIA

Although much is known about the incidence of unemployment in Australia over the recent past, the causes of unemployment remain controversial. Various explanations have been advanced, some of which focus on the unemployment benefits system. The present study examines the problem of high effective marginal tax rates faced by young social security recipients wishing to engage in part-time employment, and the resultant emergence of so-called ‘poverty traps’. We examine budget constraints for unemployed eighteen year olds, both singles and couples, for part-time employment in four low income occupations; namely, brickie's labourer, public service clerk, stationhand and sales assistant. The results indicate that pervasive disincentive effects exist for young people seeking low wage employment.     

The macroeconomic effects of basic income funded by a land-holding tax in Korea

We examine the macroeconomic effects of the introduction of a scheme to pay a basic income of approximately $900 per year to each citizen through a land-holding tax. Unlike other studies, we address the issue of whether a sharp increase in the land-holding tax rate intended to raise funds for a basic income scheme causes landowners to sell their land. We also use the relationship between holding assets and reservation wages to determine whether household members supply their labor in accordance with the payment of basic income. Our simulation results obtained using data for Korea show that the introduction of the basic income scheme decreases real gross domestic product, total labor demand, and social welfare by 1.3%, 0.3%, and 0.4%, respectively.     

Macroeconomic adjustment in Thailand: Demand management and supply conditions

Within the framework of a four-sector macroeconomic model for Thailand, comparative statics are used to assess alternative ways of macroeconomic adjustment. Fiscal policy interventions, manipulations of the exchange rate, and productivity improvements are discussed. Their implications in terms of income generation, external deficit, and inflation are derived. It is shown that only productivity improvements have positive effects on all indicators. Fiscal interventions lead to an improvement in the external deficit, but at the cost of income generation. The outcome of a devaluation is largely dependent on the behavior of factor prices.     

Unemployment and economic security for young adults in Finland,Norway and Sweden: From unemployment protection to poverty relief

In this study, we investigated if there has been a displacement in the type and coverage of welfare services available for young unemployed adults in Finland, Norway and Sweden over the last two decades. This question is important because a number of studies have argued that the generous unemployment benefits and extensive labour market intervention found in the Nordic welfare states shield young people from the most severe consequences of economic inactivity. In this article, we instead show that during this period, less generous means‐tested unemployment and social assistance benefits have become the most important form of income protection for young people. In evidence, earnings‐related unemployment benefits now cover only 10 per cent of unemployed Swedes and Finns and 45 per cent of unemployed Norwegians aged 24 years or younger. This development marks a significant change in our understanding of unemployment protection for young people in Nordic countries.     

Integrating citizen's income with social insurance

Citizen's income or social dividend schemes are a way of avoiding the "poverty trap", or disincentive effect, inherent in withdrawing unemployment compensation completely when the beneficiary returns to work. If there are inadequate financial incentives for the unemployed to return to work, the benefit administration may feel the need for tighter discipline of the unemployed, threatening to withdraw benefit from those who reject offers of low-paid work. Citizen's income provides better incentives to work without so much need for sanctions. The article explores four different methods of introducing a citizen's income gradually by allowing people to keep an increasing proportion of their benefit as they move from unemployment into work. New transfers would also be made to never-unemployed workers, to secure equity between all persons whatever their employment status or history. The best method is to define an hourly unemployment benefit, and make benefit for a certain number of hours unconditional on employment status. This gives better incentives to work part-time than existing benefit systems, and fairer treatment for those who can only find a part-time job. Minimum wage regulation is important, to prevent employers taking advantage of a citizen's income to reduce wage rates.