110 research outputs found
Trade Liberalisation and Employment Effects in Ukraine
No full textThis paper addresses the effects of trade liberalisation on job flows. It studies the case of Ukraine where the sudden opening up of the economy to trade can be viewed as a quasi-natural experiment. We use disaggregated data on manufacturing industries and customs data on trade flows to account for shifting trade patterns after the disintegration of the Soviet Union and the Council of Mutual Economic Assistance (CMEA) trade regime. We provide, for the first time, evidence on job flows at the three-digit sector level in Ukrainian manufacturing and show that these flows are predominantly driven by idiosyncratic factors within industries. However, we also establish that trade openness does affect job flows differently across different trading areas. We find that while trade with Commonwealth of Independent States decreases job destruction, trade with the European Union increases excess reallocation mainly through job creation. Comparative Economic Studies (2008) 50, 318–340. doi:10.1057/palgrave.ces.8100250
Three essays on monetary policy in the UK
Get PDFThe dissertation studies monetary policy in the UK and specifically three topics: the monetary policy reaction function of the Bank of England, the influence of QE on nominal income and the determination of inflation and the role of money in it.
In the study of the reaction function of the Bank of England in chapter 2 (which draws on Cobham and Kang, 2012a), there are two issues involved a comparison of two different approaches: the GMM approach and the ex ante forecast approach. The first issue is the time horizons for inflation and the output gap. The estimations using the GMM method indicate that the best fit is for inflation one year ahead and for the output gap one quarter ahead. The estimations in the ex ante forecast approach indicate the best fit should be for inflation two years ahead and output growth one quarter ahead, which is closer to the Bank of England’s view. The second issue is about the smoothing behaviour in interest rate decisions. The GMM method suggests smoothing behaviour incorporated in a lagged dependent variable while the ex ante forecast method suggests no smoothing since the lagged change of the interest rate is not significant in the regression. The latter suggestion is also closer to former policy makers’ views. In addition, the GMM method may suffer from a weak instruments problem and the ex ante forecast approach is a better method to estimate the monetary policy reaction function. I also try to apply the ex ante forecast approach to the reaction function of the European Central Bank, with results which are less precise but still closer to what the ECB claims to do.
The third and the fourth chapters address the monetary aggregates, which have been ignored in monetary policy research for a long time but fluctuated strongly during the financial crisis period and after QE was implemented. What’s more, while most work in recent years focuses on the fluctuations in financial markets, the dissertation discusses the influence of the crisis and QE on macroeconomic activity. In chapter 3 (which draws on Cobham and Kang, 2012b), a flow of funds matrix is used to illustrate the monetary developments. This is followed by regressions of a naïve ad hoc reduced form model which considers the growth of nominal spending as determined by the growth of
nominal money and other variables. The results of the regression suggest that money has had a bigger role since the crisis and under QE. Then various counterfactual assumptions about money growth are made and the counterfactual paths of nominal spending are calculated by using the estimated parameters of the regression above. The comparison of those counterfactuals indicates that QE has had a considerable influence on nominal spending. In the fourth chapter, money growth is studied in a long-run perspective, in terms of its relation with inflation. In a reduced-form Phillips curve, inflation is explained by variables at different frequencies. The money growth, GDP growth and interest rate change which are included in the Quantity Theory of Money are expected to link inflation at low frequency while the output gap as well as exchange rate and import price has a relation with inflation at high frequency. The frequency-domain technique is used in this process. The estimated results suggest money has a relationship with inflation only at low frequency while the output gap, on the other hand, relates inflation at high frequency. Then regressions on low frequency and high frequency are also run. Frequency-wise causality measures follow to support the indications. From the results given by the third and fourth chapters, it is suggested that it is the time to pay attention to money again in monetary policy research. And it would be useful to incorporate money or credit into wider macroeconometric models of the UK economy
The Hyperinflation Model of Money Demand (or Cagan Revisited): Some New Empirical Evidence from the 1990s
No full textThis paper employs cointegration techniques to examine three recent hyperinflationary episodes in transition economies, which, with the exception of Russia (1992-1994), have been largely overlooked in the literature. More specifically, these episodes include Bulgaria during 1995-1997 and Ukraine during 1993-1995. We use the well-known maximum likelihood estimator due to Johansen (1988, 1991) and Stock and Watson's (1993) dynamic ordinary least squares (DOLS) estimator to complement each other and obtain consistent estimates of the semi-elasticity of real money demand with respect to inflation. The empirical results obtained in this study support the Cagan model of money demand in the East European hyperinflation experiences of the 1990s. However, our results do not indicate that the rational expectations hypothesis holds during these episodes. In addition, we also test the hypothesis that monetary policy in these three hyperinflations was conducted with the sole intent of maximizing the inflation tax revenue for the government.Cagan, cointegration, inflation tax, transition economies, stabilizations
Essays on macroeconomic policy
Get PDFThis thesis consists of four relatively independent essays in macroeconomics. Chapter 1 focuses
on inflation targeting (IT) as a monetary framework. While the importance of achieving stable
inflation is well established from a theoretical perspective, whether inflation targeting
economies have achieved policy results which are significantly different from other regimes is
still a subject of debate in the literature. This study contributes by addressing the endogeneity of
IT adoption in a formal way and addresses Gertler’s (2005) critique by contrasting the
performance of IT against another clearly defined monetary framework. As results do not show
much evidence in favour of IT in the long run, I explore other reasons for the success of IT. It
turns out that apart from being a clearly defined policy framework, which puts pressure on a
central bank to commit to policy targets and be transparent about its decisions, IT improves the
dynamics of an economy’s response to some of the common macro shocks.
In Chapter 2, I use Bayesian shrinkage methods to examine the determinants of the recovery
after the recent financial crisis. Having examined a wide range of macroeconomic
preconditions, I find that only the financial deepening and fiscal policy are the most important
determinants of the recovery. Interestingly, even accounting for unconventional measures, the
statistical significance of the monetary response is limited.
During the work on the Chapter 2, it became clear that measuring fiscal response is quite
challenging and most of the statistical approaches are prone to serious issues. So, chapter 3
contributes by building an action-based dataset of fiscal decisions (2006 to 2015) on the basis
of an examination of a range of policy documents. As a result I produce an index of a country’s
fiscal stance, which I subsequently use in my Chapter 2 to investigate the effect of fiscal policy
on the recovery of output following the crisis.
Chapter 4 produces a regime-switching extension to a theoretical DSGE model of financial
intermediation and unconventional monetary policy by Gertler and Karadi (2011), by allowing
for switches in the capital quality process and an unconventional policy rule. Its important
contribution is allowing for the possibility of switches to a zero-lower bound (ZLB) regime. It
turns out that the agents may interpret a shock in various ways across the regimes, and that
forms the dynamics of the system and results in certain welfare outcomes. For example, the
possibility of a switch to ZLB massively influences the expectations of the agents and makes
them behave very differently than they would in a model without a ZLB constraint. The results
of Bayesian estimation fitted to quarterly US data show that even a simple New Keynesian
model may be used as a tool to examine the economic history of the United States and explore
the effects of unconventional monetary policy measures
Three essays about monetary policy in China
Get PDFThe thesis focuses on three aspects of China's monetary policy since the 1980s.
Chapter 1 examines the monetary policy actions of the central bank in China. A
new policy stance index incorporating a range of di erent monetary policy instruments
is developed and examined. The empirical results suggest that the PBC is
informally targeting in
ation although no explicit target has been announced. Chapter
2 focuses on China's monetary conditions and aggregate demand in terms of the
monetary conditions index (MCI). Di erent transmission channels are considered
through which monetary conditions might in
uence aggregate demand. The empirical
tests show that the MCIs contain useful information about future output growth
and in
ation in China over the short and medium term. Chapter 3 examines the scal
challenges to the monetary authority's control over the price level in China. The
empirical result suggests a scal dominance regime. When a pegged exchange rate
regime is considered, it is argued that in the presence of large capital in
ows and
strong central bank interventions, the monetary authority can generate seigniorage
without worrying about the foreign exchange reserves to decrease
Learning Hyperinflations
Get PDFEmprical studies of hyperinflations reveal that the rational expectations hypothesis fails to hold. To address this issue, we study a model of hyperinflation and learning in an attempt to better understand the volatility in movements of expectations, money, and prices. The findings surprisingly imply that the dynamics under neural network learning appear to support the outcome achieved under least squares learning reported in the earlier literature. Relaxing the assumption that inflationary expectations are rational, however, is essential since it improves the fit of the model to actual data from episodes of severe hyperinflation. Simulations provide ample evidence that if equilibrium in the model exists, then the inflation rate converges to the low inflation rational expectations equilibrium. This suggests a classical result: a permanent increase in the government deficit raises the stationary inflation rate (Marcet and Sargent, 1989)Hyperinflation, Learning, Rational Expectations Equlibria, Neural Networks
Proyecto plantas medicinales - Universidad del Valle
No full text<p>Proyecto plantas medicinales.</p>
<p>Jorge H. Ramírez</p>
<p>Universidad del Valle</p>
<p>--</p>
<p>Dec 10, 2014.</p>
<p>Co-author added: Atanas Atanasov. University of Vienna. </p>
<p> </p
Learning Hyperinflations
Get PDFEmprical studies of hyperinflations reveal that the rational expectations hypothesis fails to hold. To address this issue, we study a model of hyperinflation and learning in an attempt to better understand the volatility in movements of expectations, money, and prices. The findings surprisingly imply that the dynamics under neural network learning appear to support the outcome achieved under least squares learning reported in the earlier literature. Relaxing the assumption that inflationary expectations are rational, however, is essential since it improves the fit of the model to actual data from episodes of severe hyperinflation. Simulations provide ample evidence that if equilibrium in the model exists, then the inflation rate converges to the low inflation rational expectations equilibrium. This suggests a classical result: a permanent increase in the government deficit raises the stationary inflation rate (Marcet and Sargent, 1989)
The competitiveness and efficiency of the Vietnamese banking sector in the face of financial liberalisation
Get PDFThis thesis provides empirical evidence of the impact of financial liberalisation on the competitiveness and efficiency of the Vietnamese banking sector by applying a combination of non-parametric frontier estimation methods, stochastic frontier methods and Tobit panel data regression techniques. There have been few studies in Vietnam linking financial liberalisation to banking sector competitiveness and efficiency. In the thesis, these parametric and non-parametric methods are applied in a pilot study to measure the allocative efficiency at branch level of the Vietnam Bank for Agricultural and Rural Development (VBARD) – the largest bank in Vietnam in terms of total assets. The technical efficiency of the Vietnamese banking sector at bank level is then estimated using the same methods.
The empirical investigation of the thesis is based on the use of branch-level data and bank-level data for a sample of more than 50 branches of VBARD across the country over the period 2004–2008 and around 40 banks over the period 2002–2012. Using data envelopment analysis (DEA) to measure allocative efficiency at branch level and technical efficiency at bank level and using stochastic frontier analysis (SFA) to estimate cost and profit efficiency at branch level, the thesis suggests that the contributions of financial liberalisation to bank efficiency are generally mixed, depending on the measures of bank efficiency used and the sub-periods taken into account. The thesis presents weak empirical evidence of the positive impacts of financial liberalisation on efficiency improvements of the Vietnamese banking sector at both branch and bank level. Banking efficiency is inconsistently increased over the period of financial liberalisation as the financial market is more liberated and the size of the banking sector substantially increased. Hence, industry rationalisation through reconsolidating and restructuring mergers and acquisitions (M&A) is required. The thesis suggests that both financial liberalisation and greater competition contribute to lower profit efficiency and higher costs for banks.
The thesis indicates that the Vietnamese banking system is dominated by large banks and that the state-owned commercial banks (SOCBs) are more efficient than the joint stock commercial banks (JSCBs), mainly because of their competitive advantage in terms of size. Furthermore, Vietnamese banking efficiency at both branch and bank levels is significantly improved by high levels of capitalisation, larger size and a better labour force, while it is hampered by low loan quality. The findings also suggest that the northern banks in Vietnam are more efficient than the southern banks.
The empirical evidence of the thesis is also focused on investigating the impact of financial liberalisation on bank technical efficiency and productivity growth, making use of a two-step approach consisting of DEA and Tobit panel data regressions. The analysis conducted across the different location groups (north and south) suggests that the impact on the technical efficiency of banks is more pronounced in the northern areas than in the southern areas. Furthermore, the Tobit estimation takes into account bank-specific differences in terms of total assets, the equity–total assets ratio, the labour–capital ratio and the provision–capital ratio; the evidence suggests that these influences are also mostly significant under financial liberalisation. As a result, the thesis suggests that financial liberalisation reinforces an independent impact on the technical efficiency of banks
UK migration at the beginning of the 21st century
Get PDFThis work analyses different aspect of migration in between the first two censuses that were conducted in the UK in the twenty-first century. The second chapter examines the factors that can have an effect on the rate at which migrants in England and Wales leave the UK in order to return to their home country during the time period between the census of 2001 and that of 2011. It uses a theory, initially developed by Borjas and Bratsberg (1996), that attempts to explain why individuals from countries outside of the UK may choose to leave the country after their arrival. Leaving may have been pre-planned before the initial migration to the host nation or may be the result of poor outcomes after arrival. It is found that many of the results found by Borjas and Bratsberg (1996) in the United States are replicated in the first decade of the Twenty-first century for the United Kingdom. In the third chapter I investigate the reasons into why there is a wage gap between native and migrant workers in the UK labour market. It provides evidence to show that the gap in wages between the two populations can be linked to the composition of the migrant cohort. It also shows that as the European Union expanded there was a significant change in the discrimination against the migrant from the countries that joined the EU in May 2004 and January 2007
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