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This paper considers an alternate dimension of government institutions associated with the separation of powers between government and its central bank. A more independent central bank is consistent with greater institutional quality and constraints on government. We propose that central bank independence influences the prevalence of the shadow, or underground, economy. Using cross‐country panel data for over 100 nations over the period 1991 to 2012, the results from instrumental variables techniques show that central bank independence curbs underground economic activity. Furthermore, considering different dimensions of independence, we find that independence related to central bank CEO, policy formation, and central bank lending are effective at checking the shadow sector. Overall, these findings are robust to a different measure of the underground economy, correcting for the potential influence of outliers, controlling for the impact of additional factors, accounting for heterogeneity related to the level of development, and considering the heterogeneity related to the prevalence of the shadow sector. The main implication of the results is that nations seeking to reduce the prevalence of the underground economy would benefit from policies that promote central bank independence. [ABSTRACT FROM AUTHOR]

The continuing presence of corruption worldwide has policymakers looking for broader trans-national efforts to combat corruption. We examine the effects of a nation's physical proximity (via land borders and the number of bordering nations) as well as prevailing corruption on cross-border corruption spillovers. Using data on 147 countries from 2012-2018, results show that while border corruption positively affects corruption in a nation, a longer land border, and more neighbors have a mitigating effect on corruption. Nesting the analysis in the literature on the determinants of cross-national corruption, these new findings imply that a nation's geographic location might play a larger role in transmissions of corruption than previously recognized. This finding has relevance for the design of anti-corruption coordination across nations. [ABSTRACT FROM AUTHOR]

Reliable supply chains are crucial to the productivity and economic growth of nations. Despite the recognition of its importance, especially brought to the forefront by the challenges of the coronavirus crises, formal research on the contribution of supply chain logistics is less forthcoming. This paper uses data on 130 nations to examine the relative effects of different aspects of supply chain logistics, including overall logistics performance, and the performance of the input and output dimensions of logistics, on economic growth. The results show that improvements in the supply chain logistics performance yield positive growth dividends. Further, the input and output dimensions of logistics performance have positive growth effects, with some quantitative differences. Significantly, the growth impact of logistics performance varies across nations with different growth rates. Implications for public policy and spillovers for COVID-19 initiatives are discussed. [ABSTRACT FROM AUTHOR]

Despite decades of research exploring the relationship between the economy and crime, there is a lack of clarity in this literature. Questions remain, particularly with respect to how the economy is measured and whether the relationship between the economy and crime is the same across contexts. The literature to date has overlooked what is called the "shadow" economy, which represents unreported economic activity. We examine the relationship between traditional measures of the legitimate economy (e.g. unemployment) and crime as well as whether the shadow economy moderates this relationship using a panel of U.S. states from 1997 to 2008. Our results show that the shadow economy reduces the strength of the relationship between the legitimate economy and crime, and the effect of the economy on crime is conditional on the size of the shadow economy. [ABSTRACT FROM AUTHOR]

Abstract: Unlike previous research on the causal relationship between government revenues and expenditures in the United Kingdom, this study estimates an asymmetric error correction model within a momentum threshold autoregressive framework over the period 1955–2009. The results indicate that government revenues respond to short-run changes in government expenditures as well as asymmetrically to budgetary disequilibrium. With respect to the asymmetric adjustment, the response of government revenues to a worsening budget is faster (in absolute terms) than to an improving budget. Thus, contrary to previous studies on the UK, the empirical findings lend support for the spend–tax hypothesis. [Copyright &y& Elsevier]

Purpose – The purpose of this paper is to examine the possibility of asymmetries in the budgetary adjustment process. Design/methodology/approach – The paper uses the TAR and MTAR models, set forth by Enders and Siklos, for the period 1957 to 2009. Findings – Short-run results indicate unidirectional causality from revenues to expenditures. Long-run results indicate asymmetric responses by both revenues and expenditures to budgetary disequilibria. With respect to asymmetric adjustment, revenues respond only when the budget is improving whereas expenditures respond faster (in absolute terms) to a worsening budget than for an improving budget. Originality/value – Contrary to other studies, the results presented in the paper lend support for the tax-spend hypothesis. [ABSTRACT FROM AUTHOR]

This study examines whether real interest rates exhibit changes in persistence for a panel of Organization of Economic Cooperation and Development countries. The findings show that for long-term real interest rates there are changes in persistence from I(0) to I(1). For short-term real interest rates, the results display the absence of changes in persistence, while under cross-sectional dependence there is only weak evidence of changes in persistence from I(1) to I(0). The evidence of changes in persistence when the direction is considered unknown is even weaker. [ABSTRACT FROM AUTHOR]