1,721,002 research outputs found
The long-run relationship between savings and investment in oil-exporting developing countries: a case study of the Gulf Arab states
Get PDFThe relationship between national saving and investment over the long termis examined for six GulfArab oil-exporting developing countries—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and theUnited Arab Emirates.We show that, provided some large outliers are properly accounted for, longrunequilibrium relationships between saving and investment (both total and fixed) exist in thesecountries. Because these countries have typically large current account surpluses, such relationshipscannot be explained by standard arguments. Our hypothesis is that the response of investment tosaving largely depends on domestic absorptive capacity
The impacts of food price and income shocks on household food security and economic well-being: Evidence from rural Bangladesh
Get PDFThis paper examines the combined impacts of food price and income shocks on household food security and economic well-being in low-income rural communities. Using longitudinal survey data of 1,800 rural households from 12 districts of Bangladesh over the period 2007–2009, we estimated a three-stage hierarchical logit model to identify the key sources of household food insecurity. The first-difference estimator was then employed to compare pre- and post-shock expenditure for those households that experienced acute food shortages and those that managed to avoid the worst impacts of the shocks. On the basis of our results we conclude that: (1) the soaring food prices of 2007–2009 unequivocally aggravated food insecurity in the rural areas of Bangladesh; (2) the subsequent income shocks of 2007–2009 contributed towards worsening food insecurity; (3) the adverse impacts of these shocks appeared to have faded over time due to labor and commodity market adjustments, regional economic growth, and domestic policy responses, leaving no profound impacts on households’ economic well-being in most cases; and (4) although the immediate adverse consequences of rising food prices were borne disproportionately by the poor, the longer term consequences were distributed more evenly across the rich and poor and were favorable for the landless day laborers
Regional Initiative in the Gulf Arab States: The Search for a Common Currency
Get PDFPurpose – This paper makes two main additions to the literature on GCC (Gulf Cooperation Council) monetary union. First, it emphasizes that the creation of a fiscal union is necessary for the GCC monetary union to succeed. Second, it proposes some alternatives to pegging to the dollar, which would allow the GCC countries to absorb large swings in global commodity prices (oil, food) in the short to medium run.
Design/methodology/approach – This paper uses exploratory research to shed light on the feasibility of a common currency for the proposed GCC Monetary Union.
Findings – Given the challenges associated with creating a GCC fiscal union as a requirement for a successful monetary union, the GCC countries could easily set up an “anti-crisis fund” to partially protect themselves from the economic and social costs of unforeseen crises. A BBC (basket, band, and crawl) currency system, at an individual country level or a regional level, would allow the GCC countries to cope with not just large swings in global commodity prices, but also as an effective instrument for the governments to promote their economic diversification.
Practical implications – This paper offers a template for the GCC central banks to consider the BBC currency system as an alternative to their existing dollar peg regime.
Originality/value – This is the first paper that attempts to provide a formal argument in support of the BBC currency system as an alternative exchange rate arrangement for the GCC countries.
Paper type – Conceptual paper
Oil and other energy commodities
Get PDFThis chapter provides a survey of studies concerning the relationship between crude oil prices and other energy commodities such as coal and natural gas. Although such an assessment demands an interdisciplinary approach to provide readers with important background information, the approach taken here is based upon the economics of the energy market. The empirical studies summarized here can be categorized into three groups: time series studies analyzing market integration between oil and other energy commodities, studies that examine the predictive content of futures prices for energy, and the role of tail risk in explaining price volatilities of oil and other energy commodities. Several suggestions for future research are offered
Regional Initiative in the Gulf Arab States: The Search for a Common Currency
Get PDFWhile many commentators have been openly critical of China's currency policy on the basis of an undervalued renminbi, despite a similar surge in GCC's (Gulf Cooperation Council) balance of payment surpluses in the first decade of this century, the vast majority of the commentators have maintained a stony silence on the undervalued Gulf currencies. This underscores the geopolitics of currencies as a form of asymmetric warfare and the consequences of dollar, euro or renminbi diplomacy. This paper makes two main additions to the literature on Gulf monetary union. First, it emphasizes that the creation of a fiscal union is necessary for the Gulf monetary union to succeed. Second, it proposes some alternatives to pegging to the dollar, which would allow the GCC to absorb large swings in global commodity prices (oil, food) in the short to medium run. The proposed exchange rate regimes are not conditional on the formation of the Gulf monetary union, and can be implemented individually or collectively
Stock markets and energy prices
Get PDFConcerns about the effects of oil prices on stock markets ebb and flow with the rise and fall in oil prices themselves. This paper reviews selected empirical evidence on the relationship between energy price shocks and stock markets. Existing evidence indicates that although a general increase in oil prices tends to favor stock markets of energy-exporting countries more than their oil-importing counterparts, a demand-led rise in oil prices tends to favor stock markets across the globe through the stimulating impact on the aggregate economy. Whereas, supply-driven surge in oil price shocks carries a less significant role in explaining fluctuations in stock returns. A brief assessment on the role of speculation in driving oil prices during 2007–2008 is also presented
Hedging emerging market stock prices with oil, gold, VIX, and bonds: A comparison between DCC, ADCC and GO-GARCH
Get PDFWhile much research uses multivariate GARCH to model volatility dynamics and risk measures, one particular type of multivariate GARCH model, GO-GARCH, has been
underutilized. This paper uses DCC, ADCC and GO-GARCH to model volatilities and conditional correlations between emerging market stock prices, oil prices, VIX, gold
prices and bond prices. A rolling window analysis is used to construct out-of-sample onestep-ahead forecasts of dynamic conditional correlations and optimal hedge ratios. In most of the situations we study, oil is the best asset to hedge emerging market stock prices. Hedge ratios from the ADCC model are preferred (most effective) for hedging emerging market stock prices with oil, VIX, or bonds. Hedge ratios estimated from the GO-GARCH are most effective for hedging emerging market stock prices with gold in some instances. These results are reasonably robust to choice of model refits, forecast length and distributional assumptions
PPP TESTS IN COINTEGRATED PANELS: EVIDENCE FROM ASIAN DEVELOPING COUNTRIES
Get PDFThis paper tests the relative version of purchasing power parity (PPP) for a set of ten Asian developing countries using panel cointegration framework. We employ ¡®between-dimension¡¯ dynamic OLS estimator as proposed by Pedroni (2001b). The test results overwhelmingly reject the PPP hypothesis.Purchasing Power Parity, Panel Cointegration, Unit Roots.
The impacts of the global food and financial crises on household food security and economic well-being: evidence from Bangladesh
Get PDFThis paper presents the first household-level study to examine the combined impacts of the global food and financial crises on household food security and economic well-being in a developing country. Using longitudinal survey data of 1,800 rural households from 12 districts of Bangladesh over the period 2007–2010, we estimated a three-stage hierarchical logit model to identify the key sources of household food insecurity. A difference-in-difference estimator was then employed to compare pre- and post-crises expenditure for those households who experienced acute food shortages and those who managed to avoid the worst impacts of the crises. On the basis of our results we conclude that: (1) the soaring food prices of 2007–2008 unequivocally aggravated food insecurity in the rural areas of Bangladesh in 2008; (2) there was some weak evidence to suggest that the global economic downturn, which followed the global food crisis, contributed towards worsening food insecurity in 2009; (3) the adverse impacts of these crises appeared to have faded over time due to labor and commodity market adjustments, regional economic growth, and domestic policy responses, leaving no profound, long-lasting impacts on households’ economic well-being; and (4) although the immediate adverse consequences of rising food prices were borne disproportionately by the poor and farming communities, the longer term consequences were distributed more evenly across the rich and poor and, in general, were favorable for the farming community
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