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ECONOMIC ISSUES

Volume 27 (2022)

Part 1, March

Please select from the titles below:

Articles

Book Reviews

Part 2, September

Please select from the titles below:

Articles

Book Reviews

 

Part 1, March

On the Dynamic Interdependency of Unemployment and COVID-19 Deaths (p.1)

by D M Welsch and D M Zimmer

Abstract: Using monthly data from U.S. counties, this paper offers evidence that rising COVID-19-related deaths appear to lead to reduced economic activity, but that reduced economic activity, in turn, helps to achieve its stated purpose: reducing subsequent deaths. Using a dynamic panel seemingly-unrelated regression model, the paper estimates that a one percentage point increase in the unemployment rate leads to approximately 3,300 fewer COVID-19-related deaths nationally in the subsequent month. From a policy perspective, that finding offers suggestive evidence that lockdowns (and other restrictions), while economically painful, appear to be effective at reducing subsequent deaths

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Do Remittances Promote Economic Growth? New Evidence from India (p.11)

by S G Dastidar and N Apergis

Abstract: This study investigates the empirical relationship between remittances and economic growth in India, placing special attention on the non-linearity of this association. Previous studies on India have ignored the non-linear nature of the remittance-growth nexus. The study employs methods from the ARDL model framework to explore the non-linearity and establishes that remittances do not exhibit any growth effect in lower quantiles and up to 0.50, but the impact increases monotonically, getting more pronounced as the quantile increases. In other words, inward remittances must exceed a threshold to start affecting economic growth positively. It is argued that this behaviour of remittances is the consequence of a combination of several factors: patterns of utilisation (or, misutilisation) of the receipts, India's trade balance, a weak industrial sector, the lack of entrepreneurial opportunities, the lack of financial inclusion, and the exploitation of poor migrant workers.

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Effect of the Utilisation of Unilateral Trade? Preferences on Foreign Direct Investment Flows to Beneficiary Countries (p.39)

by S K Gnangnon

Abstract: This article explores the effect of non-reciprocal trade preferences (NRTPs) offered by the QUAD countries to developing countries on the foreign direct investment (FDI) flows to these developing countries. The analysis uses an unbalanced panel dataset of 108 beneficiary countries of NRTPs over the period 2002-2019. By means of the two-step system Generalised Method of Moments estimator, it establishes that low utilisation rates of Generalised System of Preference (GSP) programmes are associated with greater FDI flows to less advanced beneficiary countries, including least developed countries (LDCs). However, high utilisation rates of GSP programmes induce greater FDI flows to advanced beneficiary countries, including Non-LDCs. In addition, low (high) utilisation rates of other trade preferences generate higher FDI flows to less advanced beneficiary countries (relatively advanced countries). The analysis also shows that GSP programmes and other trade preferences are strongly complementary in enhancing FDI inflows, especially for high utilisation rates of other trade preferences programmes. The utilisation of each of these two blocks of NRTPs generates greater FDI flows to countries that endeavour to export increasingly complex products, or those with lower dependence on natural resources. Finally, the utilisation of NRTPs generates higher FDI inflows to countries that substantially liberalise their trade regimes.

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Part 2, September

Personality and Patterns of Savings: the Theory of Economic Growth beyond Optimal Behaviour (p.1)

by O Gomes

Abstract: In optimal growth models, in which the goal of the representative agent is to maximise intertemporal utility, the time trajectories of consumption and savings are endogenously determined. Deviations from such trajectories are not desirable and the rational economic agent will act with the purpose of avoiding them. Despite this logical argument, empirical evidence reveals a wide diversity of savings behaviour across the population: individuals with similar initial conditions and facing identical constraints often adopt savings patterns that are far from being coincidental. Such observation suggests that personality traits interfere in savings decisions, and eventually divert these decisions from those leading to purely optimal outcomes. Even when individuals know the optimal solution, their personality may compel them to act as savers or spenders, to a greater or lesser extent. This paper explores the impact and implications of different personalities in shaping savings and consumption trajectories, in the context of a standard growth model. Analytical results are derived for models of neoclassical growth and for models of endogenous growth. In a first stage, a standard infinite horizon scenario is considered. Subsequently, this is complemented by a setting of finite life cycles, where growth outcomes of a given generation are likely to be influenced by the consumption-savings decisions of the precedent generation.

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What the Analysis of 136 Studies from 1960 to 2020 Tells Us About Comparative Regionalism Studies (p.31)

by S C A El Maaly

Abstract: In recent years (from the late 1990s to 2020), the number of studies comparing regional integration processes around the world has increased significantly. However, the number of papers aiming to group and analyse these studies in order to determine the main trends in the field is still very limited. We attempt to fill this gap by analysing 136 studies (journal articles, book chapters, institutional reports, working papers, research centre publications and university papers such as dissertations and theses) from 1960 to 2020. In this article, we identify the main terms used in comparative regionalism studies and their evolution. We present the historical development of the field and identify the main organisations that are often compared in these studies. We also present the main points of comparison and the methods used in these studies, and discuss the case of the European integration model in comparative regionalism studies (the n=1 problem). This work creates and analyses one of the largest databases available on comparative regionalism studies. It can therefore facilitate the work of students and researchers interested in comparative regionalism and contribute to the development of this field of research.

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Determinants of SEZ Units' Export Performance and the Mediating Effects of Commitment, Knowledge and Capabilities (p.87)

by S Thayyil and P M Habeeburahiman

Abstract: Since exporting is the simplest way to reach the international market, understanding the determinants of a firm?s export market performance is the key to attain a better position in the export market. Using survey data of over 103 key people responsible for the export in the two Special Economic Zones (SEZ) in India namely Cochin and Madras SEZ. Drawing on Resource Based View theory, the study examines on location, firm size, firm age, international experience of key personnel and firm resources as potential determinants of firm-level export performance. In addition to that, it checks the mediating effect of capabilities, knowledge and commitment on export performance through resources. The findings show that the location, size, international experience and age of a firm have no relation with its export performance, whereas resources have significant positive relation. Resources directly influence the export performance and indirectly through commitment, knowledge and capabilities. Capabilities act as a good mediator between resources and performance compared to other mediators in the model. The firms are first recommended to acquire physical, human, financial and organisational resources to be successful in their ventures. On top, they are suggested to strengthen their relational, product development and informational capabilities along with acquiring export knowledge and increasing commitment.

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