Capita Trade Research Articles

Dynamic linkages among CO2 emissions, health expenditures, and economic growth: empirical evidence from Pakistan.

The linkage between high concentration of greenhouse gases (GHGs) and climate change is well recognized as there is severe influence of climate change on public health. Carbon dioxide is most prominent GHG which deteriorates the environment and impacts human health. On the parallel, economic growth also affects health conditions sometimes positively or vice versa. The objective of this research work is to examine the dynamic linkages among CO2 emissions, health expenditures, and economic growth in the presence of gross fixed capital formation and per capita trade by using auto regressive distributive lag (ARDL) model for Pakistan covering annual data from the year 1995-2017. Our empirical results show that there is significant long run as well as short-term causal relationship between health expenditure, CO2 emissions, and economic growth in Pakistan. Bidirectional relationship of Granger causality is found between health expenditures and CO2 emissions, and further between health expenditures and economic growth. Short-run unidirectional causality is running from carbon emissions to health-related expenditures. The bidirectional causal relationship is also investigated between carbon emissions and growth as well as gross fixed capital formation and growth. Then, policy recommendations towards controlling pollution, particularly CO2 emissions and health expenditures without compromising economic growth are suggested. Graphical abstract .

A robust analysis of the relationship between renewable energy consumption and its main drivers

We provide a comprehensive and robust analysis of the drivers of renewable energy consumption for a panel of 64 countries, using both the static (Pooled OLS, Panel Fixed and Random Effects) and dynamic (difference and system GMM) panel data estimation approaches. We show that the dynamic panel data model provides more efficient estimators than the static ones and that increases in per capita CO2 emissions and per capita trade with foreign partners mainly drive the changes in per capita renewable energy consumption. We also find limited evidence of oil price effects on renewable energy consumption, which reflects the fact that renewable energy is just a complement and not a perfect substitute of crude oil, at least in the short run.

Trade Intensity, Net Export, and Economic Growth

AbstractMany studies suggest the positive causal effects of trade on productivity and growth. However, controversies are still prevalent among vast empirical studies on the issue. In this paper, I propose a standard empirical framework for investigating GDP growth and apply the framework to estimate the growth effects and transmission channels of per capita trade. Based on prior information, theoretical reasoning, and various empirical evidences, I conclude that international trade has positive independent effects on economic performance. A 1% increase in per capita trade raises the equilibrium GDP growth by 0.29%.

A Product-Quality View of the Linder Hypothesis

The Linder hypothesis has attracted substantial empirical research over decades. However, the evidence has failed to provide consistent support for it. This paper explains the failure. Building a theoretical framework in which, as in Linder's theory, product quality plays the central role, I show that the Linder hypothesis is formally derived but holds only when formulated as a sector-level prediction. This prediction is then estimated using a sample of 64 countries in 1995. The results support the sectoral Linder hypothesis: controlling for the effect of intersectoral determinants of trade, countries of similar income per capita trade more intensely with one another.

Exchange rates and the trade balance: Evidence from Germany

The textbook J-curve, which describes the trade balance of a nation initially worsening after a real depreciation of the home currency, then getting better, has drawn increased attention in the past decade. The decline in the exchange value of the dollar and the persistence of the American trade deficit during the 1980s prompted economists to re-examine the traditional theory. A number of studies [e.g., Rose and Yellen, JME, 1989] question the empirical validity of the theory for the U.S. A necessary condition for the J-curve to obtain is that a nation's trade balance respond to changes in the real exchange rate. This study tests that hypothesis by examining the causality (in the Granger sense) of the deutsche mark and West Germany's trade balance during the current floating exchange rate regimes. Germany experienced a persistent trade surplus during the 1970s that seemed to react little to the exchange rate, providing a natural experiment. It is well-known that regressing I(1) variables on one another leads to spurious regression problems. Augmented Dickey-Fuller tests reject the null hypothesis of a unit root for the real effective exchange rate but not for the real per capita trade balance. However, economic theory suggests that the real trade balance cannot be unbounded. When tested with linear and quadratic trend terms [suggested in Ouliaris et al., Advances in Econometrics, 1989], the null is not rejected nearly as strongly. It is felt that this non-rejection is due to the small sample size and low power of the tests. The remainder of this paper treats the real per capita trade balance as trend stationary. The Granger-causality regression is then written as follows:

The Distribution of Outlay and the "Multiplier" in the British Dominions

When people receive their money incomes they may employ them in any of three ways: (1) they may spend them on imported products, (2) they may spend them on services or goods produced locally, (3) they may save, accumulating bank deposits or securities. The way in which people in general and exporters in particular dispose of additions to their incomes, and the manner in which they economize when their incomes diminish, are important factors in determining the ultimate effect of an initial change in the level of incomes. If most of an increase of incomes is spent upon the purchase of goods produced within the country, it will induce re-employment and a further increase in incomes; if spent upon imports, its effect will be upon the foreign exchange situation rather than employment.The Marginal Propensity to Import. The extent to which a community devotes any addition to its existing incomes to the purchase of goods from abroad has been called by Mr. Paish the “marginal propensity to import.” The high per capita trade of the Dominions ensures a fairly high propensity to import. But another cause contributes to the high propensity. Their imports are, in considerable degree, high grade manufactures and luxury articles: just the sort of things which will be more in demand if incomes rise and will be dispensed with if incomes fall. Moreover, machinery and capital goods rank high amongst their imports, and these will be in demand chiefly when incomes are rising.