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This paper explores the impact of the political hierarchies of cities in China from different perspectives. First, we examine the economic disparities between prefectural cities and municipalities. Furthermore, this paper draws upon a quasi‐ experiment to analyze the impact of upgrading Chongqing to a municipality in 1997 using the synthetic control method. The city‐upgrading policy significantly increased Chongqing's gross domestic product (GDP) in the following 4 years. Finally, we find that the policy increased GDP in treated cities within 1200 km of Chongqing by about 10%–13% relative to the control cities. [ABSTRACT FROM AUTHOR]

Copyright of Regional Science Policy & Practice is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper seeks to provide new empirical evidence that demonstrates the importance of digital technologies in promoting economic growth, drawing on the literature on advances in growth and leveraging a broader and more robust country-level panel dataset. In particular, this paper estimates the long-run economic impact of digital technologies using mobile phone penetration and internet usage as broad indicators. The empirical results suggest that, between 2004 and 2014, the diffusion of digital technologies significantly improved economic output in Australia and abroad, contributing to steady-state gross domestic product per capita growth of approximately 5.8 per cent on average. These findings could serve as the starting-point for predictions about the likely impact of future technologies, providing a better understanding for policy-makers in prioritising initiatives that will continue to lift living standards in the coming years. [ABSTRACT FROM AUTHOR]

Given the scanty and inadequate studies on Serbia's growth performance before the First World War, this paper presents production‐side GDP estimates for Serbia for six years between 1867 and 1910. It probes into the growth dynamics, assessing convergence with the more developed countries of north‐western Europe, as well as progress towards achieving modern economic growth. Although the economy showed some dynamism in terms of overall GDP, per capita GDP in pre‐First World War Serbia grew by only 0.28 per cent per annum, as much of the overall GDP growth was eroded by rapid population growth. Far from converging with north‐western Europe, Serbia continued to fall behind. Sluggish structural transformation and slow income per capita growth suggest that Serbia's transition to modern economic growth was in its infancy. Growth in the dominant agricultural sector was extensive, driven by expanding arable land and population growth. Land was affordable and easy to obtain; hence, peasants invested little in new technologies. Meanwhile, the modern industrial and service sectors were below a threshold that could sustain rapid growth. Nevertheless, this study also highlights the rapid expansion of a small modern sector and export diversification that reflected emergent 'green shoots' in 1905–10. [ABSTRACT FROM AUTHOR]

Copyright of Regional Science Policy & Practice is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper uses a new methodology based on industry comovement to examine the role of financial market development in intersectoral allocation. Based on the assumption that there exist common global shocks to growth opportunities, we hypothesize that country pairs should have correlated patterns of sectoral growth if they are able to respond to these shocks. Consistent with financial markets promoting responsiveness to shocks, countries have more highly correlated growth rates across sectors when both countries have well-developed financial markets. This effect is stronger between country pairs at similar levels of economic development, which are more likely to experience similar growth shocks. [ABSTRACT FROM AUTHOR]

The paper uses various approaches: capital asset pricing, mean-variance, global minimum-variance, Bayes-Stein, Bayesian and multi-prior to develop foreign equity bias measures for Australia’s international equity holdings in 41 countries, over the period 2001 to 2012. Bayesian models allow for various degrees of mis-trust in the ICAPM model. Multi-Prior restricts the expected return for each asset to lie within specified confidence interval around its estimated value. Mean-Variance computes optimal weights by sample estimates of mean and covariance matrix of sample return. Bayes-Stein shrinks each asset’s historical mean return toward the return of the minimum variance portfolio and improves precision associated with estimating the expected return of each asset. The plausible sources of foreign equity bias are trade, GDP per capita, real GDP growth rate, exchange rate volatility, tax credit, stock market development, familiarity and institution variables. The paper finds that economic cost of the observed foreign bias is low. The paper analyses correlation effect on the foreign bias and finds that economic loss decreases with an increase in correlation. [ABSTRACT FROM AUTHOR]

This paper introduces a model in which greater inequality reduces growth in economies with low levels of financial development but that this effect is attenuated in economies with more developed systems. The model also predicts that individuals in economies with developed financial markets have a higher tolerance to inequality. Using a panel dataset that covers a large number of countries, this paper shows empirical evidence that is consistent with the main predictions of the model. Overall, this paper's major findings highlight that some of the pernicious effects of inequality can be attenuated by improving access to credit. [ABSTRACT FROM AUTHOR]

Copyright of Papers in Regional Science is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The purpose of this paper is two-fold. First, in the context of a spatial model we generalize two indices. One is a dynamic generalization of the emanating effect that was introduced by Kelejian and colleagues. This index describes how events in one unit spill over time to other units due to spatial interactions. As an analogy, it corresponds to the effect that the smoking habits of a given teenager might have on the smoking habits of each of his/her friends. In a sense, our second index, termed the vulnerability index, is the reverse of the first one in that it describes the response of a given unit over time to events in neighbouring units. The analogy here would be how the smoking habits of a given teenager is affected by the smoking habits of all of his/her friends. Second, we empirically implement our indices in the context of a model explaining GDP per capita growth in various countries. In this context the vulnerability index describes the sensitivity of GDP growth in one country with respect to events in other countries; the emanating effect describes how events in one country effect the GDP growth in other countries. Resumen Este artículo tiene un doble objetivo. En primer lugar, y dentro del contexto de un modelo espacial, generalizamos dos índices. El primero es una generalización dinámica del efecto de emanación introducido por Kelejian y colaboradores. Este índice describe cómo lo que sucede en una unidad se extiende con el paso del tiempo a otras unidades por motivos de interacciones espaciales. A modo de analogía, se corresponde con el efecto que podría tener el hábito de fumar de un adolescente en el hábito de fumar de cada una de sus amistades. En cierto sentido, nuestro segundo índice, denominado índice de vulnerabilidad, es lo contrario del primero ya que describe la respuesta de una unidad a lo que sucede en unidades vecinas con el paso del tiempo. La analogía en este caso sería el efecto que podrían tener los hábitos de fumar del conjunto de amistades de un adolescente en particular en su consumo de tabaco. En segundo lugar, realizamos una implementación empírica de nuestros índices dentro del contexto de un modelo que explica el crecimiento per cápita del PIB en varios países. Dentro de este contexto, el índice de vulnerabilidad describe la sensibilidad del crecimiento del PIB de un país en relación con lo que sucede en otros países, mientras que el efecto de emanación describe como lo que sucede en un país afecta al crecimiento del PIB de otros países. [ABSTRACT FROM AUTHOR]

Dungey and Pagan (2000) present a SVAR model of the Australian economy which models macroeconomic outcomes as transitory deviations from a deterministic trend. In this paper we extend that model in two directions. First, we relate it to an emerging literature on Dynamic Stochastic General Equilibrium modelling of small open economies. Second, we allow for both transitory and permanent components in the series and show how this modification has an impact on the design of macroeconomic models. [ABSTRACT FROM AUTHOR]

Copyright of Papers in Regional Science is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper examines the influence of foreign direct investment (FDI) on economic growth in five SAARC member countries - Bangladesh, India, Nepal, Pakistan, and Sri Lanka. Using time series data from 1990 to 2010, an empirical model is estimated in which growth of real GDP depends on FDI, investment, openness, tax policy and inflation. After establishing the stationarity of the data series, cointegration tests are performed, and an error correction model is developed and estimated. The empirical results indicate that, unlike investment and openness to international trade, FDI has not played a significant role in promoting economic growth in these countries. We conclude that the effectiveness of FDI may depend in part on the size of the inflows, as well as the level of economic development. [ABSTRACT FROM AUTHOR]

Copyright of Papers in Regional Science is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper studies how airports affect economic growth in US metropolitan areas. The main finding is that airport size has a positive effect on local employment, with an elasticity of 0.04. The effect appears to be mostly due to a positive effect on services employment and to be concentrated in parts of the metropolitan area nearer the airport. To further understand how an airport affects the local economy, the effects on several other variables are estimated. Airport size is found to have positive effects on the number of firms, the population size, the rate of employment, and GDP in the local area. The magnitudes of the effects on population and employment suggest that airport expansion creates jobs for both existing residents and migrants to the area. The estimation uses a novel technique to identify the effects of airport infrastructure. It applies instruments for changes in airport size that are calculated from overall changes in air traffic in a set of categories: the airlines, the types of aircraft, or the distances flown. The technique could be adapted to study the effects of other types of infrastructure. [ABSTRACT FROM AUTHOR]

ABSTRACT This paper analyses the costs of housing crises in terms of GDP growth and the economic conditions under which crises are particularly costly. Housing crises are often followed by recessions that are longer than other recessions. According to empirical estimates, a housing crisis reduces the GDP growth rate in the following year on average by two percentage points and has still a considerable negative impact in the second year. One important channel through which the effect of housing crises is passed on seems to be the banking sector. In addition, our results suggest that negative wealth effects possibly cause further reductions in GDP growth. [ABSTRACT FROM AUTHOR]

The empirical relationship between trade protection and economic growth is surprisingly fragile, as shown in a number of other papers. We address one possible explanation for these findings: that the relationship is contingent on the pattern of comparative advantage, following the endogenous growth literature. Our findings suggest that such contingencies do in fact exist-in particular, the correlation between tariffs and growth is strong and positive for skill-abundant countries-and are robust to the choice of control variables. [ABSTRACT FROM AUTHOR]

ABSTRACT This paper presents a model to predict French gross domestic product (GDP) quarterly growth rate. The model is designed to be used on a monthly basis by integrating monthly economic information through bridge models, for both supply and demand sides, allowing thus economic interpretations. For each GDP component, bridge equations are specified by using a general-to-specific approach implemented in an automated way by Hoover and Perez and improved by Krolzig and Hendry. This approach allows to select explanatory variables among a large data set of hard and soft data. A rolling forecast study is carried out to assess the forecasting performance in the prediction of aggregated GDP, by taking publication lags into account in order to run pseudo real-time forecasts. It turns out that the model outperforms benchmark models. The results show that changing the set of equations over the quarter is superior to keeping the same equations over time. In addition, GDP growth seems to be more precisely predicted from a supply-side approach rather than a demand-side approach. [ABSTRACT FROM AUTHOR]

This paper provides empirical evidence that there is no convergence between the GDP per-capita of the developing countries since 1950. Relying upon recent econometric methodologies (non-stationary long-memory models, wavelet models and time-varying factor representation models), we show that the transition paths to long-run growth (the catch-up dynamics) are very persistent over time and non-stationary, thereby yielding a variety of potential steady states (conditional convergence). Our findings do not support the idea according to which the developing countries share a common factor (such as technology) that eliminates per-capita output divergence in the very long run. Instead, we conclude that growth is an idiosyncratic phenomenon that yields different forms of transitional economic performance: growth tragedy (some countries with an initial low level of per-capita income diverge from the richest ones), growth resistance (with many countries experiencing a low speed of growth convergence), and rapid convergence. [ABSTRACT FROM AUTHOR]

We examine the relationship between offshoring and the labor market in an occupational choice model of trade and endogenous growth where workers are employed on the basis of their individual skill levels. Trade liberalization leads to offshoring and reduces employment in the manufacturing sector. Displaced workers move into traditional and innovation sectors according to their skill levels, shaping real wages and aggregate productivity in the manufacturing sector. The paper aims to show how inter-sectoral labor market adjustments, highlighted by skill heterogeneity, could be a possible explanation for the simultaneous rise in productivity and reduction in real wages that have coincided with the sharp escalation of offshoring activities in the U.S. manufacturing sector since 2004. ( JEL F16, F23, J24) [ABSTRACT FROM AUTHOR]

Copyright of Canadian Journal of Economics is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper uses an instrumental variables approach to estimate the relationship between trade openness and economic growth in Sub-Saharan Africa. Instrumental variables estimates show that economic growth has a significant negative contemporaneous effect on trade openness, while trade openness has a significant positive effect on economic growth. A 1 percentage point increase in the ratio of trade over GDP is associated with a short-run increase in growth of approximately 0.5% in a given year; the cumulative long-run effect on the level of GDP per capita is larger, reaching about 2%. [ABSTRACT FROM AUTHOR]

This paper argues that corruption in developing countries has deep historical roots that go all the way back to their colonial experience. We substantiate our thesis with empirical evidence where the degree of European settlement during colonial times is a powerful explanatory factor of present-day corruption. Interestingly, our mechanism is different from the prevailing view in the literature on institutions and growth, where European settlement has only positive effects. We argue that European settlement leads to higher levels of corruption for all countries where Europeans remained a minority in the population, i.e. for all developing countries. [ABSTRACT FROM AUTHOR]

Copyright of Regional Science Policy & Practice is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Abstract: This paper examines the ability of financial variables to predict future economic growth above and beyond past economic activity in a small open economy in the euro area. We aim to clarify potential differences in forecasting economic activity during different economic circumstances. Our results from Finland suggest that the proper choice of forecasting variables is related to general economic conditions. During steady economic growth, the preferred choice for a financial indicator is the short-term interest rate combined with past values of output growth. However, during economic turbulence, the traditional term spread and stock returns are more important in forecasting GDP growth. The time-varying predictive content of the financial variables may be utilized by applying regime-switching nonlinear forecasting models. We propose a novel application using the negative term spread and observed recession as signals to switch between regimes. This procedure yields a significant improvement in forecasting performance at the one-year forecast horizon. [Copyright &y& Elsevier]

Recent work suggests that financial development is important for economic growth, since financial markets more effectively allocate capital to firms with high value projects. For firms in poorly developed financial markets, implicit borrowing in the form of trade credit may provide an alternative source of funds. We show that industries with higher dependence on trade credit financing exhibit higher rates of growth in countries with weaker financial institutions. Furthermore, consistent with barriers to trade credit access among young firms, we show that most of the effect that we report comes from growth in the size of preexisting firms. [ABSTRACT FROM AUTHOR]

This paper studies linear and nonlinear autoregressive leading indicator models of business cycles in G-7 countries. Our models use the spread between short-term and long-term interest rates as leading indicators for GDP. We examine data admissibility by determining whether these models have the ability to produce time series with classical cycles that resemble the observed classical cycles in the data, and then we ask whether this data admissibility lends itself to better predictions of the probability of recession. Copyright © 2007 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

For nearly two years the Japanese economy has grown significantly faster than commentators expected, raising the question of whether the country has finally broken out of its long economic malaise. This article by Simon Knapp examines recent developments to see whether this recovery is sustainable. It argues that over the last year the recovery has broadened out beyond merely the export sector, although there are good reasons to believe that growth as measured by GOP has been overstated and that many serious structural problems remain. Business investment has surged on the back of rising profitability and an improved labour market has helped lift consumer confidence. At the same time the paper recognises the importance of China's boom in stimulating the Japanese economy over the last two years, and estimates that this factor may have boosted the level of GDP by between 1 to 2%. With Chinese growth now moderating to more sustainable levels, export growth will slow over the next year or so. However, domestic demand should now be strong enough, in the absence of major external shocks, to generate GDP growth of around 1.5 to 2% per annum in the medium term; a respectable figure given the country's falling population. [ABSTRACT FROM AUTHOR]

Discusses the process of economic growth. Growth of gross domestic product per capita; Endogenous growth models; International trade.

Copyright of Papers in Regional Science is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The theoretical literature on fiscal federalism has identified several channels through which government decentralization could affect economic growth. Much of the literature focuses on the efficiency aspects of a decentralized provision of public services, but decentralization may also increase growth by raising the ability of the political system to innovate and carry out reforms. In contrast, some authors argue that decentralization increases corruption and government inefficiency, and thus may diminish growth. Given this theoretical ambiguity, several studies have attempted to identify the effect of decentralization on economic growth empirically over the last two decades. We review and conduct a meta-analysis of this empirical literature. Based on our analysis, we point out open questions and discuss possible ways to answer them. ( JEL H77, O43, C52) [ABSTRACT FROM AUTHOR]

In the last 2 decades, there has been a remarkable proliferation of indices of well-being which assess and rank country performance according to a diverse range of environmental, political, health, social or economic measures. This growth is a clear sign of their political importance, popular appeal and operational relevance in decision-making. This article discusses questions about the validity and scope of summary indices of well-being, as well as explores the relevance of country rankings. Acknowledging that these measures are imperfect, but that they may be the best measures we have, this article discusses how these composite indicators can be improved and how policy-makers should be using them. [ABSTRACT FROM AUTHOR]

Copyright of Papers in Regional Science is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The developed world is dependent upon an increasingly unreliable strategy of economic growth to avoid a range of social problems. The character of growth in the developed world has become increasingly perverse, being based partly on frustration strategies, in response to the widespread satiation of basic needs. The rise of satiation has been obscured by the focus of economists on output measures, such as GDP. Meanwhile, trade engagement with the developing world - a potential strategy for need-satisfying growth - is hampered by fears of intellectual property arbitrage and agricultural protectionism. Near term, growth could be sustained by overcoming these impediments. Longer term, a transition is required from growth in output to growth in sophistication. [ABSTRACT FROM AUTHOR]

Taxing agriculture to mobilize resources for industrialization has been a widely used development strategy. Using novel cross-country time-series data sets with direct measures of agricultural taxation, we examine how a policy bias against agriculture affects the speed of convergence in income per capita, structural change, and economic growth. We find that distortionary agricultural policies in poor economies can account for the emergence of convergence clubs in our sample by significantly retarding their structural transformation and economic growth. Overall, we find no evidence suggesting that policies that discriminate against agriculture have been beneficial for long-term economic growth. [ABSTRACT FROM AUTHOR]

Copyright of Canadian Journal of Economics is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Explores the role of savings, investment and productivity in economic growth in Australia from 1861-1900 and 1949-1990. Assessment on savings rates; Lack of long-term relationship between savings and investment; Interaction between investment, gross domestic product and productivity growth; Relevance of sub-optimal savings concerns in intergeneral equity and welfare.

This paper develops a simple theory governing the relationship between useful energy consumption and national output that explains why the adjusted elasticities found by two economists turned out to be greater than one. The theory is quantified by reference to a wide range of countries covering the whole spectrum of economic development and is tested against the actual experience over 20 to 25 years of individual countries. Conformity to the theory was very close and the efficiency-in-use coefficients computed by economists were found to hold good for periods of 20 to 25 years. Briefly, the hypothesis states that as a country moves through the various stages of its economic development from primitive subsistence agriculture to the ultimate state of fully energy-dependent production, its useful energy elasticity steadily falls from a high value tending asymptotically to one. By itself this proposition is of little use to energy forecasters, because it simply substitutes the requirement to predict energy intensiveness of output for the requirement to predict energy consumption. If we can satisfy ourselves that real GDP per capita is a good measure of energy intensiveness, however, then the relationship derived above can be used as the basis for a mathematical model linking useful energy consumption per capita with GDP per capita.

The article offers information on the emerging economic development in China. It states that the government of China started 12th Five Year Plan aiming to increase total research and development (R&D) spending to 2.2 percent of gross domestic product by 2015. It further states that the country has partnered with other countries to increase trading opportunities in China.

Economic growth has brought improvements in many areas of child health, but its effects on anaemia among school‐aged children remain unknown. However, this is important because iron deficiency anaemia is common and is the main cause of disability‐adjusted life years for school‐aged children. In this study, we included 429,222 Chinese children aged 7–17 years from five consecutive national cross‐sectional surveys during 1995–2014. Using altitude‐adjusted haemoglobin concentration measured from capillary blood samples, we defined anaemia status according to World Health Organization's recommendation. We used logistic regressions weighted by provincial population to examine the association between provincial gross domestic product (GDP) per capita and anaemia, adjusting for sex, age, urban–rural location, regional socio‐economic status (SES), fixed effect of province, and clustering of schools. We used generalised additive mixed models to evaluate a potentially non‐linear relationship. For each 100% growth in GDP per capita, there was a 40% (odds ratio [OR] = 0.60; 95% confidence interval [CI; 0.56, 0.65]) reduction in anaemia. However, the association was weaker for girls and in cities with a lower SES. The association was weaker across 2005–2014 (OR = 0.75, 95% CI [0.62, 0.90]) compared with 1995–2005 (OR = 0.52; 95% CI [0.44, 0.61]), reflecting a weaker association when GDP per capita reaches around $2,000. The results were similar for moderate‐to‐severe anaemia. We concluded that economic growth has been associated with reductions in anaemia among school‐aged children in China but with fewer benefits for girls and those in poorer settings. Further economic development in China is unlikely to bring similar reductions in anaemia, suggesting that additional population level and targeted interventions will be needed. [ABSTRACT FROM AUTHOR]

This article examines the Genuine Progress Indicator (GPI), which seeks to respond to the shortcomings of GDP and the main contemporary challenges to welfare. As a monetary indicator, the GPI is uniquely suited to evaluate the impact of policy proposals and its dashboard‐like features are able to track changes in contributing variables. While the GPI is currently not available for use in cross‐country analyses, it will be measurable using a standard methodology once certain data issues have been resolved and a consensus is reached on GPI 2.0. Currently, the main obstacles to its widespread use are lack of political leadership and institutional support. [ABSTRACT FROM AUTHOR]

This article examines the economic development of Turkey from a comparative global perspective. With the help of GDP per capita and other series, it shows that Turkey's record in economic growth and human development since 1820 has been close to world averages and a little above developing country averages. The early focus of the article is on the proximate causes—average rates of investment, below‐average rates of schooling, low rates of total productivity growth, and low technology content of production—which provide important insights into why GDP per capita increases were not any higher. For the deeper causes, the article emphasizes the role of institutions and institutional change. Turkey's formal economic institutions had been influenced by international rules since the nineteenth century, and these rules did not always support economic development. Turkey's elites also made extensive changes in formal political and economic institutions. Formal institutions were only part of the story, however. The direction of institutional change also depended on the political order and the degree of understanding between different groups and their elites. When the political system could not manage the recurring tensions and cleavages between the different elites, economic outcomes suffered. [ABSTRACT FROM AUTHOR]

We propose an exogenous measure of a country's growth opportunities by interacting the country's local industry mix with global price to earnings ( PE) ratios. We find that these exogenous growth opportunities predict future changes in real GDP and investment in a large panel of countries. This relation is strongest in countries that have liberalized their capital accounts, equity markets, and banking systems. We also find that financial development, external finance dependence, and investor protection measures are much less important in aligning growth opportunities with growth than is capital market openness. Finally, we formulate new tests of market integration and segmentation by linking local and global PE ratios to relative economic growth. [ABSTRACT FROM AUTHOR]

Computable general equilibrium (CGE) models are a standard tool for policy analysis and forecasts of economic growth. Unfortunately, due to computational constraints, many CGE models are dimensionally small, aggregating countries into an often limited set of regions or using assumptions such as static price‐level expectations, where next period's price is conditional only on current or past prices. This is a concern for climate change modeling, since the effects of global warming by country, in a fully disaggregated and global trade model, are needed, and the known future effects of global warming should be included in forward‐looking forecasts for prices and profitability. This work extends a large dimensional intertemporal CGE trade model to account for the various effects of global warming (e.g., loss in agricultural productivity, sea level rise, and health effects) on Gross Domestic Product (GDP) growth and levels for 139 countries, by decade and over the long term, where producers look forward and adjust price expectations and capital stocks to account for future climate effects. The potential economic gains from complying with the Paris Accord are also estimated, showing that even with a limited set of possible damages from global warming, these gains are substantial. For example, with the comparative case of Representative Concentration Pathway 8.5 (4°C), the global gains from complying with the 2°C target (Representative Concentration Pathway 4.5) are approximately US$17,489 billion per year in the long run (year 2100). The relative damages from not complying to Sub‐Sahara Africa, India, and Southeast Asia, across all temperature ranges, are especially severe. [ABSTRACT FROM AUTHOR]

We study the long‐term effects of budgetary rules on GDP growth rate and analyse the determinants of the short‐term GDP growth dynamics. For both a sample of 19 OECD and a subsample of 12 European countries, we show that, in the long run, improvements in the cyclically adjusted budget balance, as well as increases in the tax burden, have negative effects on GDP growth. The highest effect of fiscal policy on GDP growth would be obtained if the structural deficits were used to increase the market size by reducing the tax burden. In line with Barro (1990), a deficit‐financed reduction of tax burden has a stronger effect for European than for OECD countries, because in Europe the government size with respect to market size is too large. Therefore, if GDP growth is a dominant policy objective, in Europe specific actions should redress the 2012 Treaty toward a reduction of the tax burden. [ABSTRACT FROM AUTHOR]

We investigate the sustainability of fiscal policy in a set of 19 European Monetary Union (EMU) countries over the period 1970–2016. Panel unit root tests in the presence of cross‐section dependence show that the government debt series is stationary, indicating that the solvency condition would be satisfied for these countries. This confirms the effectiveness of the austerity measures implemented by these member states. Moreover, an unobserved common factor drives the comovement of government debt in the Eurozone. [ABSTRACT FROM AUTHOR]

We study how stochasticity in the evolution of agricultural productivity interacts with economic and population growth at the global level. We use a two-sector Schumpeterian model of growth, in which a manufacturing sector produces the traditional consumption good and an agricultural sector produces food to sustain contemporaneous population. Agriculture demands land as an input, itself treated as a scarce form of capital. In our model both population and sectoral technological progress are endogenously determined, and key technological parameters of the model are structurally estimated using 1960-2010 data on world GDP, population, cropland and technological progress. Introducing random shocks to the evolution of total factor productivity in agriculture, we show that uncertainty optimally requires more land to be converted into agricultural use as a hedge against production shortages, and that it significantly affects both optimal consumption and population trajectories. [ABSTRACT FROM AUTHOR]

The article discusses trends, updates, and outlook for the Australian economy. Topics explored include the gross domestic product (GDP), consumption, and unemployment rates recorded from 2017 to 2018, international economic developments in the U.S., Europe, and China which could impact Australia, and the contribution of non-mining business investments to Australian economic growth.

▀ World trade has picked up in recent months, expanding at the fastest pace in six years in the first quarter, with the rise fairly evenly split between advanced and emerging markets. Stronger activity in China and a broader upturn in global investment have been key factors. But there are still reasons for caution. Although the 'cyclical' element in world trade is improving, the 'trend' element is not thanks to changes in supply chains and a lack of trade liberalisation., ▀ World trade growth looks set to reach about a 4% annual rate in Q1 2017, the fastest pace since 2011. Alternative freight-based indicators confirm the upturn. This suggests some modest near-term upside risk to our world growth forecasts., ▀ Recent growth has been evenly split between advanced countries and emerging markets (EM). In EM, the end of deep recessions in Russia and Brazil and an upturn in China have been key factors. China directly added 0.5 percentage points to annual world trade growth over recent months and firmer growth there has also pushed up commodity prices and the spending power and imports of commodity exporters., ▀ Another important positive factor is an improvement in investment, which is a trade-intensive element of world GDP. Rising capital goods imports across a range of countries suggest the drag on world trade from weak investment is fading., ▀ The decline in the ratio of world trade growth to world GDP growth over recent years has both cyclical and structural elements. But while the cyclical component now seems to be improving, there is little evidence that the structural part - responsible for between a half and two-thirds of the recent decline - is doing likewise., ▀ Key factors behind the structural decline in world trade growth are changes in supply chains and a lack of trade liberalisation/protectionism. Both are likely to remain a drag over the coming years. Meanwhile, a levelling-off of growth in China and drop back in commodity prices could curb the recent cyclical uptick. [ABSTRACT FROM AUTHOR]

Since the late 1970s, the received wisdom has been that government size (measured as the ratio of total government expenditure to gross domestic product ( GDP) or government consumption to GDP) is detrimental to economic growth. We conduct a hierarchical meta-regression analysis of 799 effect-size estimates reported in 87 primary studies to verify if this assertion is supported by existing evidence. Our findings indicate that the conventional prior belief is supported by evidence mainly from developed countries but not from less developed countries. We argue that the negative relationship between government size and economic growth in developed countries may reflect endogeneity bias. [ABSTRACT FROM AUTHOR]