The impact of globalization and financial development on India’s income inequality

This paper empirically examines the combined effects of globalization and financial development on income inequality in a unified framework for an emerging economy. Using annual data for the Indian economy over the period 1980–2014, we show that the perceived benefits of globalization and financial development have not trickled down; rather, has aggravated income inequality. Our results also indicate that while inflation aggravates income inequality, education seems to alleviate the differential effect. Proactive measures in providing access to financial services, creating equitable employment opportunities, and improving the quality of education are required to offset the negative impacts of globalization and financial development on income disparity.     

Impact of finance on growth: Does it vary with development levels or cyclical conditions?

Financial systems are complex and may support economic growth differently at various stages of economic development. This study of 90 countries extends the financial development-economic growth literature by using four proxies of financial development (banking, stock market, bond market and insurance), and considering a country’s level of economic development, on both a full and pre-global crisis sample. As expected financial markets have different effects on growth where the level of economic development vary. Policy makers should find that the insurance sector offers the most benefit for economic growth at all levels of development. Stock markets promote growth for middle income countries. Similarly bond markets promote growth with middle and high income countries. Some bond market and stock market results differed in the pre-crisis sample. Policies which promote trade but limit other areas such as inflation, government consumption and crises, should also support growth.     

南宁市应对金融危机的策略选择

金融危机正在对全球实体经济产生严重损害,世界经济增长动力减弱、复苏乏力。在经济全球化的背景下,中国经济虽然在短期内所受影响较小,但在未来中长期内其发展形势依然严峻。作为中国宏观经济的一部分,在金融危机的挑战下,积极深化改革,尽快实现经济增长方式的转变将是南宁市应对危机、实现经济稳定快速发展的必然选择。     

金融危机对亚洲金融合作的推动效应探析

随着全球经济一体化的发展,东亚区域经济一体化已成为必然趋势。为了保证经济稳定,维护金融安全,使东亚各经济体在国际金融体系中获得更大的发言权和发展空间,东亚区域金融合作势在必行。在此背景下,金融危机对亚洲金融合作产生了强有力的推动作用。分析金融危机产生推动效应的原因,总结在金融危机推动下亚洲金融合作的发展特点,并展望亚洲金融改革的前景。     

The impact of infectious diseases on remittances inflows to India

The economic crisis triggered by the COVID-19 pandemic seems to be grimmer when observed from the migration perspective. Remittances play a vital role in economic development of India through promoting output growth, household spending on health and education, poverty alleviation, financial inclusion and entrepreneurship. Given the importance of remittances, it is important to analyse how the current pandemic will influence the remittances inflows to India. Towards this end, the study employs a gravity model approach to the determinants of remittances with special attention to the impact of infectious diseases in the host countries. The present study constructs a dataset on bilateral remittances from 99 destination countries and utilizes the data on prevalence of infectious diseases in the host countries during the period 2000–2018 to assess the impact of the latter on the inflows of remittances to India. The results of the study based on a variety of estimators tackling various econometric issues suggest a statistically significant negative impact of prevalence of infectious diseases in the host country on the inflows of remittances. The negative impact of infectious diseases on remittances suggest that while there are downside risks in the wake of current pandemic, the scenario does not seem to be that bleak as the remittances to India are countercyclical with respect to economic growth in the home country and largely decoupled from host country macroeconomic fundamentals. As the remittances act as shock absorbers during the time of low economic growth in the home country, India must further build up a conducive eco system to nurture these valuable foreign exchange in a well directed manner.     

Practice and Outcomes of Multidisciplinary Research for Environmental Sustainability

Since about 1990, when sustainability became a key concept for a wide range of scientific disciplines, the need for multidisciplinary collaboration has increased. We present five illustrative cases from the long-standing environmental research work at the University of Groningen. The projects described are about hazardous materials risk, odor annoyance, energy scenario evaluation, climate decision analysis, and household consumption, respectively. The various case discussions emphasize experiences in research conceptualization, project design and execution, main findings, policy advice and surplus value, and difficulties met. Conclusions and recommendations are presented about the practice of multidisciplinary research. Finally, some challenges for research and development about environmental sustainability are discussed.     

Effect of financial development on economic growth in sub-Saharan Africa

This paper examines the overall economic growth effect when the growth in finance and real sector is disproportionate relying on panel data for 29 sub-Saharan African countries over the period 1980–2014. Results from the system generalized methods of moments (GMM) reveal that, while financial development supports economic growth, the extent to which finance helps growth depends crucially on the simultaneous growth of real and financial sectors. The elasticity of growth to changes in either size of the real or financial sector is higher under balanced sectoral growth. We also show that rapid and unbridled credit growth comes at a huge cost to economic growth with consequences stemming from financing of risky and unsustainable investments coupled with superfluous consumption fueling inflation. However, the pass-through excess finance–economic growth effect via the investment channel is stronger.     

经济全球化:如何达到"共赢和共存"

经济全球化是当代世界经济发展的客观趋势 ,其主要表现是生产活动全球化、国际贸易扩大、对外直接投资增加、世界金融市场急剧膨胀等方面。经济全球化对世界经济发展有双重作用 ,利弊同在。世界各国应加强经济技术的交流与合作 ,逐步改变不公正不合理的国际经济秩序 ,使经济全球化达到共赢和共存的目的。     

Do political instability,financial instability and environmental degradation undermine growth? Evidence from belt and road initiative countries

This study investigates the extent to which political instability (PI), financial instability (FI), and environmental degradation undermine economic complexity (EC). EC is more predictive of future growth and development patterns and correlates with the increased ability to create and export a wide variety of sophisticated (high productivity) items. Using data from up to 56 BRI nations, I routinely obtain precise estimates of the negative effect of PI and FI on EC. Further, we examined the indirect effect of PI and FI through the channel of human capital (HC). These findings confirm the core premise that institutional stability largely influences economic complexity by encouraging creative entrepreneurship, HC accumulation, and allocating human resources to productive activities. Moreover, we examined the indirect effect of PI and FI through the channel of CO₂ emissions. These findings support the idea that countries with stable institutions can reduce pollution and protect the environment. It could increase economic complexity while reducing environmental degradation. The main findings support the creation of a pro-development institutional framework that enhance environmental sustainability and reduces poverty by increasing economic complexity.     

The role of deficit and debt in financing growth in West Africa

Empirical literature on debt–growth nexus and deficit-growth nexus indicate that government debt and fiscal deficit could have negative effects on economic growth after a certain threshold level. However, the impacts of debt and deficit on economic growth via the financial sector have not been thoroughly explored. Thus, this study examines the effects of debt and deficit on finance–growth nexus in West African region. It employs empirical strategies that account for various economic and econometrics issues. Evidence from the study reveals that the impact of financial development on growth varies with the levels of debt and deficit. Specifically, the marginal effects of financial development on growth turn negative when debt and deficit exceed the threshold levels of 48.6% and −13.5% of GDP, respectively. The implication of this study is that the financial sector is one of the channels through which debt and deficit exert their influences on economic growth. Thus, an increase in financial development would not produce the desirable long-run economic benefits unless it is accompanied by a reduction in government debt and fiscal deficit. Based on the findings, the study makes some policy recommendations.     

The G20 and the world economy: Performance and prospects

In the twenty-first century the balance of world economic growth has shifted from the G7 industrialized economies, led by Europe, Japan, and the United States, to the emerging economies of Asia, especially China and India. While world growth will continue at a rapid pace, members of the G7 will grow more slowly than the world economy, while China and India will grow more rapidly. Growth in the advanced economies will recover from the financial and economic crisis of the past decade, but a longer-term trend toward slower economic growth will be re-established.     

Financial development and economic growth: New evidence from Tunisia

This paper examined an empirical investigation of whether financial development can boost economic growth in Tunisia. We used an Autoregressive Distributed Lag method to assess the finance-growth relation taking private credit, value traded and issuing bank's securities on the financial market as financial development indicators.The empirical results showed that the domestic credit to private sector has a positive effect on the economic growth suggesting that the financial development is a driver of a long term economic growth, but subject to a financial fragility at the short run. Moreover, this study confirmed the view of bidirectional relationship between credit and economic growth. However, we found that neither the stock market development nor the intervention of banks in the stock market had robust and positive effects on the economic growth. Thus, Tunisia is recommended to accelerate in priority the financial reforms of the Tunisian stock market in order to contribute to mobilize savings and promote long run economic growth.     

Development and environment: An illustrative model

Many aspects of the physical environment are affected by the process of economic growth and development, creating a need to understand the internal dynamics of environmental systems and their relation to the level and price of economic activity. The present paper sets forth a simple mathematical model of environment, and uses it to illustrate the relationship between economic development and the environment. The model incorporates dynamic features of environmental change—its self-regenerating capacity and the existence of an extinction threshold—and measures the effects of the state of development and its rate of growth in terms of extraction, consumption or destruction, and beneficial inputs. The model also allows consideration of alternative relations defining the extinction threshold, carrying capacity, and the basic growth rate of the environmental system. Both the effect of development on the environment and the reverse-feedback effect of the environment on development are considered.     

Liberalization,crisis and growth in MENA region: Do institutions matter?

The main purpose of this study is to investigate the interaction between financial liberalization, banking crisis and economic growth by taking into consideration the role of institutions. Our sample covers 15 Middle East and North African observed during the period 2000–2013. Using a dynamic panel data framework, our findings reveal that financial liberalization contributed to improve economic growth in MENA countries while banking crisis had harmful effects on MENA economies. The quality of institutions did not have a clear impact except for rule and order and democratic institution. These results have important policy implications. To grow output and avoid the occurrence of banking crisis, MENA countries should reinforce their institutions quality by adopting good practice of governance and regulation.     

Regime-specific impact of financial reforms on economic growth in Pakistan

This study uses and proposes a new methodological approach to construct a financial liberalization index on the basis of the dynamic factor model technique. The resulting index is used to investigate the impact of the financial sector reforms in Pakistan on economic growth. Using the Markov regime-switching model over the period 1972–2015, the empirical results showed that the examined relationship is nonlinear, nonmonotonic, state-dependent, and better described by the two-state Markov switching model characterized by the high growth regime and low growth regime. Despite the positive impact of financial liberalization on economic growth in both the high and low growth regimes, financial liberalization relatively strongly affects real GDP growth in the high growth regime. The results further demonstrate that transition probabilities establish an inordinate episode of the low growth regime. Furthermore, the high growth regime is relatively short-lived than the low growth regime. Among the other variables, trade openness and physical capital stock have a positive impact on economic growth, while labor force and government expenditure exert a negative effect on economic growth. Several economic policies are proposed and discussed for better functioning of financial sector development in Pakistan.     

经济全球化与发展中国家可持续发展问题

贸易自由化进程日益加快,跨国公司的数量和规模不断扩大,金融全球化的影响日益加深,高科技的发展极大地拉近了经济全球化的进程。经济全球化趋势不可避免,它在促进发展中国家经济增长的同时,也影响到发展中国家的可持续发展。结合我国实际情况,应在国际政治经济秩序、能力建设、环保产业、技术创新和金融可持续发展方面采取相应的对策。     

Socio‐Economic Factors and Mental Health of Young People in India and China: An Elusive Link with Globalization

Globalization and its related social, cultural, and economic changes have significant mental health outcomes for young people. However, mental health disorders among youth are seldom included in the range of problems linked to globalization. It is imperative that these multifaceted associations are considered in light of the substantial and increasing burden of disease caused by mental illness, particularly in Asian countries, which are comparatively young and in next few decades will be the major sources of the growth of world’s young population. The evidence reviewed in this study makes an argument that globalization has increased [relative] poverty and deprivation, social and income inequality, migration, occupational stress, educational competition, and educated unemployment in India and China. Simultaneously there is evidence which shows that these variables are causally linked with mental health of young people. Altogether, these phenomena are accompanied by higher rates of suicide among lower class, migrant, and student youth. This substantiates the proposition that globalization has significant consequences for the mental health of young people. Some interventions for debate and discussion are considered.     

Does globalization drive long-run inequality within OECD countries? A guide to policy making

We analyse around four decades of annual time-series data revisiting the long-run relationship between globalization and income inequality for 24 OECD member countries across different geographical regions, applying the Yamamoto-Kurozumi multivariate vector autoregression (VAR) framework. We observe that rapid globalization is not the key cause of rising long-run intra country inequality. This result is obtained by controlling for growth, terms of trade, minimum wage legislation, and unionization and found robust by further controlling education. Most of the countries in our study with a long-run relationship reveal the robust reverse causal impact of rising globalization on reducing inequality. Our impulse response breakdown across various sub-components of globalization suggests that economic globalization is not a primary contributor to long-run inequality for developed industrialized countries. Our framework guides future research to concentrate more on country-specific relationships, with policy guidance tailored for each country based on their level of economic development and institutional quality.     

全球金融危机背景下的中国经济发展战略转型

改革开放30年来的经济腾飞,以国际市场需求为导向的外向型经济功不可没;在经济全球化时代,一国经济与外部的相关性应体现为主动性、获益性、可控性、可持续性,否则,这种依赖性就会造成对外依赖的“锁定”;世界上没有哪个大国的现代化是依靠外向型经济战略而完成的。对于外向型经济转型,自主型发展战略是一个最优选择。处于全球金融风暴中的中国,应该实施自主型发展战略,通过技术创新、制度创新、管理创新,同时又强调外向型经济与内向型经济之间、区域之间、城乡之间、国内外市场之间、人与自然之间、经济与社会之间以及各种文化融合和更新之间的均衡和协调,实现经济发展战略尽快转型。     

Examining the variation in local water sustainability practices

As sustainable development is becoming more important to ensure the economic success and social well-being of any government, without regard to its level, the efficient use and protection of natural resources has increased in importance. And local governments are at the forefront of developing sustainability policy in many ways. This study investigates the factors that influence the variation in local sustainability practices in one critical area, water conservation. The variation in adoption of water sustainability programs in municipalities across the U.S. is hypothesized to rely on three key factors: environmental condition, form of government, and fiscal condition. Our findings from an ordered logistic regression model indicate that municipalities with high drought level, high environmental policy priorities, and high community wealth are likely to adopt more water conservation programs.