We investigate the impacts of geopolitical risks (GPRs) on financial stress (FS) in major emerging economies from 1985 to 2019. Applying a recently developed panel quantile estimation method, we show ...that GPRs pose serious risks to the stability of the financial condition in emerging economies. Namely, when FS is already equal to or above average, GPRs intensify this instability to a remarkable degree. Nevertheless, GPRs do not ignite the stress when the financial situation is benign. In emerging economies, foreign exchange markets and, to a lesser extent, the banking industry and the debt market suffer more severe consequences of geopolitical tensions than the stock market. In contrast, advanced economies, represented by the Group of Seven (G7), have witnessed detrimental consequences of GPRs on their stock markets, but negligible effects on other parts of their financial systems.
This paper provides recent cross-national evidence of the impact of the great recession on fertility in Europe in the context of the recent decade. Using data from the Human Fertility Database from ...Eurostat and from the OECD database, the authors employ fixed-effects modeling to study how changes in unemployment rates have affected birth rates across Europe. They find that countries that were hit hard by the recession show reduced fertility when compared with a continuation of recent trends, especially at younger ages. The results indicate a strong relationship between economic conditions and fertility. However, there is variation by region, age, and parity suggesting the importance of life course and institutional factors.
The aim of this paper is to investigate whether there has been a fundamental change in the relationship between economic conditions and fertility. We use panel data methods to study the short-term ...changes in total fertility and the unemployment rate in a range of Organisation for Economic Co-operation and Development (OECD) countries from 1957 to 2014. We find that although fertility was counter-cyclical before 1970, with good economic times being associated with lower fertility, since then it has become pro-cyclical, with good economic times being associated with higher fertility.
The authors investigate how the Global South's gross domestic product (GDP) is impacted by trade with China. While the current literature on the growth impacts of trade (by leading partner countries) ...often neglects the properties of macro panel data, such as cross-sectional dependence, heterogeneity and structural breaks, their models take these features into account. Their empirical results based on 22 major developing countries from 2000Q1 to 2016Q4 identify positive contributions of imports from China to GDP in the studied sample, although these effects are smaller compared to imports from other emerging and developing economies (excluding China) (EME) and advanced economies (AdE). The authors also show that, in contrast with considerable impacts of exports to EME and AdE, exports to China have limited effects on the growth of its partners. However, the global financial crisis marks a turning point of China's role as a major driver of growth in the South. Namely, while the positive growth effects of trade with China after the global crisis are on the rise, the opposite is true for EME and AdE. Examining the effects by individual countries, the authors present that the distance between China and its partners, economic and institutional development levels of its partners are almost irrelevant to the contributions of imports from China to its partners' growth. Based on these findings they provide some important policy recommendations for the economies of the Global South.
This paper takes a multiple testing perspective on the problem of determining the cointegrating rank in macroeconomic panel data with cross-sectional dependence. The testing procedure for a common ...rank among the panel units is based on Simes' (1986) intersection test and requires only the p-values of suitable individual test statistics. A Monte Carlo study demonstrates that these simple tests are robust to cross-sectional dependence and have reasonable size and power properties. A multivariate version of Kendall's tau is used to test an important assumption underlying Simes' procedure for dependent statistics. The proposed method is illustrated by an empirical application.
This article investigates the existence of a long-run money demand relation for a panel data consisting of 13 OECD countries. The analysis is based on the most recent data. The existence of a ...long-run money demand relation is tested with two new meta-analytic panel cointegrating rank tests which are robust to cross-sectional dependence. Cross-sectional dependency in the data generating process is modelled by unobserved common factors. The observed data are decomposed into idiosyncratic and common components, and these two components are analysed separately to find out the driving forces of the long-run stationary relationship. The evidence shows that the long-run money demand relation is driven by the cross-unit cointegration. Finally, the long-run relation is estimated by taking the common factors into account.
This paper demonstrates that in the long-run the main determinants of the real housing prices for a panel dataset comprising the quarterly observations of 12 OECD countries are the real GDP per ...capita and the real interest rate along with the global stochastic trends.
•The main determinants of the real house prices are analyzed.•The panel data analysis comprises the period of recent financial crisis.•Newly developed panel cointegration techniques are employed.•In the long-run real GDP and interest rates have positive effects on housing prices.•In the long-run global stochastic trends affect also housing prices.
This article proposes a new likelihood-based panel cointegration rank test which extends the test of Örsal and Droge (2014) (henceforth panel SL test) to dependent panels. The dependence is modelled ...by unobserved common factors which affect the variables in each cross-section through heterogeneous loadings. The data are defactored following the panel analysis of nonstationarity in idiosyncratic and common components (PANIC) approach of Bai and Ng (2004) and the cointegrating rank of the defactored data is then tested by the panel SL test. A Monte Carlo study demonstrates that the proposed testing procedure has reasonable size and power properties in finite samples.
A new panel cointegrating rank test which allows for a linear time trend with breaks and cross-sectional dependence is proposed. The new correlation-augmented inverse normal (CAIN) test is based on a ...modification of the inverse normal method and combines the p-values of individual likelihood-ratio trace statistics by assuming that the number of breaks and break points are known. A Monte Carlo study demonstrates its robustness to cross-sectional dependence and its superior size and power properties compared to other meta-analytic tests used in practice. The test is applied to investigate the long-run relationship between regional house prices and personal income in the United States in view of the structural break introduced by the Global Financial Crisis.
The modern economy is flooded with products that have no monetary price. However, it is becoming something of an established fact that many zero-price products are not ‘free’ but rather incur costs ...for consumers in other ways. Many governments intervene in markets when consumers are not being given a fair price for their products. If the costs to consumers for some products are not monetary however, how can governments evaluate whether the costs that consumers are incurring are too high? We seek to answer this question by assessing the approaches of the US and the EU to zero-price markets as informed by their legal and ideological traditions. We offer potential policy solutions while outlining the difficulties that accompany government intervention in zero-price markets and the obstacles when it comes to measuring non-monetary forms of consumer cost.
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