Project description:The study aims to shed new lights on the lead-lag relationships between the financial sector (RFSI) and economic growth (GDP) in the midst of global economic policy uncertainty (GEPU) shocks for BRICS economies. Hence, the bivariate, partial, and wavelet multiple correlations techniques are employed. From the bivariate analysis, we document positive bi-directional causality between the RFSI and economic growth over the sample period. The partial wavelet reveals that GEPU shocks distort the significance and directional comovements between the RFSI and GDP. Moreover, the outcome from the wavelet multiple cross correlations (WMCC) indicates that the RFSI is a first mover at most time scales for the BRICS economies. This is followed by GEPU which either leads or lags for most scales, especially for South Africa. The impact of GEPU on RFSI and GDP is worst for South Africa in about four cases in the medium-, and long-terms. This signifies that South Africa's financial markets and economic growth are vulnerable to GEPU. However, the impetus for GEPU to drive the comovements between the financial sector and economic activity was less pronounced in the pre-COVID analysis conducted with the WMCC. The study supports both the supply-leading and demand-following hypotheses. Our findings also underscore the need for policymakers, investors and academics alike to incessantly observe the dynamics between finance and growth across time and periodicity while considering adverse shocks from global economic policy uncertainty in tandem.
Project description:This research examines the effect of economic policy uncertainty (EPU) indices on Pakistan's stock market volatility. Particularly, we examine the impact of the economic policy uncertainty index for Pakistan and bilateral global trading partner countries, the US, China, and the UK. We employ the GARCH-MIDAS model and combination forecast approach to evaluate the performance of economic uncertainty indices. The empirical findings show that the US economic policy uncertainty index is a more powerful predictor of Pakistan stock market volatility. In addition, the EPU index for the UK also provides valuable information for equity market volatility prediction. Surprisingly, Pakistan and China EPU indices have no significant predictive information for volatility forecasting during the sample period. Lastly, we find evidence of all uncertainty indices during economic upheaval from the COVID-19 pandemic. We obtained identical results even during the Covid-19. Our findings are robust in various evaluation methods, like MCS tests and other forecasting windows. Supplementary Information The online version contains supplementary material available at 10.1007/s10690-023-09410-1.
Project description:We study emerging markets' 1980s lost growth decade, triggered by the massive reversal of the snowball effect in the US during 1974-1984, finding that higher flow costs of servicing debt overhang explain the dramatic decline in growth rates of exposed emerging markets. We also show how lowering the US cost of servicing its public debt has been associated with higher US, Japan, and Western Europe real output growth rates during the post WWII recovery decades, 1946-1956, and validate that fiscal adjustments of large countries have strong growth and volatility spillovers effects on exposed emerging markets and developing countries.
Project description:This paper studies the US and global economic fundamentals that exacerbate emerging stock markets volatility and can be considered as systemic risk factors increasing financial stability vulnerabilities. We apply the bivariate HEAVY system of daily and intra-daily volatility equations enriched with powers, leverage, and macro-effects that improve its forecasting accuracy significantly. Our macro-augmented asymmetric power HEAVY model estimates the inflammatory effect of US uncertainty and infectious disease news impact on equities alongside global credit and commodity factors on emerging stock index realized volatility. Our study further demonstrates the power of the economic uncertainty channel, showing that higher US policy uncertainty levels increase the leverage effects and the impact from the common macro-financial proxies on emerging markets' financial volatility. Lastly, we provide evidence on the crucial role of both financial and health crisis events (the 2008 global financial turmoil and the recent Covid-19 pandemic) in raising markets' turbulence and amplifying the volatility macro-drivers impact, as well.Supplementary informationThe online version supplementary material available at 10.1007/s10479-021-04042-y.
Project description:Differing from previous studies ignoring the nonlinear features, this study employs both the linear and nonlinear Granger causality tests to examine the complex causal relationship between health care expenditure and economic growth among 15 Organisation for Economic Co-operation and Development (OECD) and 5 major developing countries. Some interesting findings can be obtained as follows: (1) For Australia, Austria, and UK, linear and nonlinear Granger causality does not exist between them. A unidirectional linear or nonlinear causality running from economic growth to health care expenditure can be found for Ireland, Korea, Portugal, and India. For these seven countries, health or fiscal policy related to health spending will not have an impact on economic growth; (2) For Belgium, Norway, and Mexico, only a unidirectional linear causality runs from health care expenditure to economic growth, while bidirectional linear causality can be found for Canada, Finland, Iceland, New Zealand, Spain, Brazil, and South Africa. Especially for the US, China, and Japan, a unidirectional nonlinear causality exists from health spending to economic growth. To improve the quality of national health, life quality and happiness, these 13 countries should actively look to optimise policy related to health care expenditure, such as by enhancing the efficiency of health costs to promote sustainable economic development.
Project description:A long literature in demography has debated the importance of place for health, especially children's health. In this study, we assess whether the importance of dense settlement for infant mortality and child height is moderated by exposure to local sanitation behavior. Is open defecation (i.e., without a toilet or latrine) worse for infant mortality and child height where population density is greater? Is poor sanitation is an important mechanism by which population density influences child health outcomes? We present two complementary analyses using newly assembled data sets, which represent two points in a trade-off between external and internal validity. First, we concentrate on external validity by studying infant mortality and child height in a large, international child-level data set of 172 Demographic and Health Surveys, matched to census population density data for 1,800 subnational regions. Second, we concentrate on internal validity by studying child height in Bangladeshi districts, using a new data set constructed with GIS techniques that allows us to control for fixed effects at a high level of geographic resolution. We find a statistically robust and quantitatively comparable interaction between sanitation and population density with both approaches: open defecation externalities are more important for child health outcomes where people live more closely together.
Project description:Based on the literature, it is commonly understood that stock prices (SP) are influenced by economic policy uncertainty (PU), with a rise in PU typically having a negative impact on SP. However, the relationship between PU and SP may not always be linear due to the varying risk preferences of individuals. Risk preference theory posits that individuals respond differently to different levels of risk. Therefore, this study aims to investigate whether PU determines SP asymmetrically (i.e., in a non-linear manner) by considering risk preferences and addressing a gap in the literature. To answer this question, the study employs a panel threshold approach to examine the effect of PU on SP in the Group of Seven (G7) countries, namely Canada, France, Germany, Italy, Japan, UK, and the US. In contrast to previous research, this study finds evidence of an asymmetric effect of PU on SP in the G7 countries. Specifically, the panel threshold results reveal that the impact of increased PU on SP is positive up to a certain level (Threshold1), beyond which it becomes negative (Threshold2). These findings are in line with information asymmetry hypothesis, prospect theory, behavioural finance hypothesis, and market liquidity hypothesis and shed light on the asymmetric behaviour of SP in response to varying levels of PU. The implications of these findings are significant for understanding how to manage risks effectively in the financial markets.
Project description:Work schedules in the service sector are routinely unstable and unpredictable, and this unpredictability may have harmful effects on health and economic insecurity. However, because schedule unpredictability often coincides with low wages and other dimensions of poor job quality, the causal effects of unpredictable work schedules are uncertain. Seattle's Secure Scheduling ordinance, enacted in 2017, mandated greater schedule predictability, providing an opportunity to examine the causal relationship between work scheduling and worker health and economic security. We draw on pre- and postintervention survey data from workers in Seattle and comparison cities to estimate the impacts of this law using a difference-in-differences approach. We find that the law had positive impacts on workers' schedule predictability and stability and led to increases in workers' subjective well-being, sleep quality, and economic security. Using the Seattle law as an instrumental variable, we also estimate causal effects of schedule predictability on well-being outcomes. We show that uncertainty about work time has a substantial effect on workers' well-being, particularly their sleep quality and economic security.
Project description:Countries in the world have various indices for the implementation of economic globalization (EG). This refers to positive and negative impacts arising from its implementation, especially in agriculture. This sector is still a basic source of existence in developing countries. At the same time, these countries have been unable to optimize their agricultural value-added (AVA) and only earn a low level of income. That way, developing countries need to take advantage of EG to increase income from agricultural exports and farmers' welfare. Other than that, there has been no study examining the impacts of EG on AVA in developing countries. So, this study intends to evaluate the impacts of the exchange rates, foreign direct investment (FDI) inflows, total agricultural export values, agricultural import duties, and fertilizer imports on AVA in developing countries. The panel data technique is used to assess its impact in 17 developing countries during 2006-2018. The study showed that FDI inflows and agricultural export values increase AVA in developing countries. In this study, EG positively impacts developing countries, but its implementation must pay attention to achieve sustainable development goals. We recommend developing countries focus on investments in human capital and technologies (or R&D), ensure foreign investors collaborate with local agricultural firms, increase agricultural exports, and create a conducive economic system.
Project description:It is enlightening to determine the discrepancies and potential reasons for the degree of impact from the COVID-19 control measures on air quality as well as the associated health and economic impacts. Analysis of air quality, socio-economic factors, and meteorological data from 447 cities in 46 countries indicated that the COVID-19 control measures had significant impacts on the PM2.5 (particulate matter with an aerodynamic diameter less than 2.5 μm) concentrations in 20 (reduced PM2.5 concentrations of -7.4-29.1 μg m-3) of the selected 46 countries. In these 20 countries, the robustly distinguished changes in the PM2.5 concentrations caused by the control measures differed between the developed (95% confidence interval (CI): -2.7-5.5 μg m-3) and developing countries (95% CI: 8.3-23.2 μg m-3). As a result, the COVID-19 lockdown reduced death and hospital admissions change from the decreased PM2.5 concentrations by 7909 and 82,025 cases in the 12 developing countries, and by 78 and 1214 cases in the eight developed countries. The COVID-19 lockdown reduced the economic cost from the PM2.5 related health burden by 54.0 million dollars in the 12 developing countries and by 8.3 million dollars in the eight developed countries. The disparity was related to the different chemical compositions of PM2.5. In particular, the concentrations of primary PM2.5 (e.g., BC) in cities of developing countries were 3-45 times higher than those in developed countries, so the mass concentration of PM2.5 was more sensitive to the reduced local emissions in developing countries during the COVID-19 control period. The mass fractions of secondary PM2.5 in developed countries were generally higher than those in developing countries. As a result, these countries were more sensitive to the secondary atmospheric processing that may have been enhanced due to reduced local emissions.