Accumulation Of Capital Stock Research Articles

Understanding the Influence of Energy Productivity and Income on CO2 Emissions in Spain (1970–2017): A Non-Linear Structural Equations Model Approach

This study examined the causal relations among per capita CO2 emissions, per capita income, non-fossil fuels electricity production, and energy productivity for the Spanish economy (1970–2017) using structural equation modeling with quadratic effects and introducing the fundamentals of the derived demand to formulate a novel approach. The relationships revealed statistical significance with a scale effect between income per capita and the level of per capita CO2 emissions. There is also a structural effect, dominated by a higher share of non-fossil fuel electricity production, and a technical effect associated with a reduction in energy intensity due to a sustained increase in capital formation and a policy of higher energy prices in the long term. Thus, climate change policies must be based on a sustained effort to modify the energy supply, in addition to an accumulation of capital stock and a sustained policy of keeping relative energy prices, at least in the transition phase to more environment-friendly energy production.

Growth decomposition of the Indian states using panel data techniques

ABSTRACT The study investigates the causes of rising economic inequality among Indian states between 2000 and 2017. To identify the components of output growth that are driving rising regional inequality in the Solow Model framework, we first create state-level data on capital stock and labour force, which are not published in India’s national accounts. While we find beta divergence in per capita state domestic product (SDP) between states, there is no evidence of beta divergence in capital stock accumulation. Therefore, differences in TFP growth, rather than capital stock accumulation, may be one of the factors contributing to India’s rising regional inequality. Furthermore, a productivity index for Indian states was created using the physical and social infrastructure, health, education, digital connectivity, and energy access to help explain the differences in states’ TFP. When common factor models were used to account for the high cross-sectional dependence between state growth rates, the influence of capital accumulation and productivity index on state growth was significantly reduced. Hence, the Indian economy’s common growth factor emerges as a major driver of the SDPs, with higher per capita SDP states benefiting more from overall growth than the lower per capita SDP states, resulting in growing regional disparities.

Additional north-south differences in China revealed by the Planetary Pressure-Adjusted Human Development Index

The UN's Planetary Pressure-Adjusted Human Development Index (PHDI) incorporates environmental footprints into development indicators. If footprints are high, PHDI is reduced compared to HDI. Many nations have seen stagnating HDI and declining PHDI. When using PHDI, >50 countries drop below the very-high development category. China has seen unprecedented development but with large inequalities. We investigate PHDI across provinces and put this in global contexts. While there is a well-known east-west regional divide, we reveal an additional significant north-south divide by PHDI. Environmental inequalities across provinces are larger than development inequalities. China reflects global extremes where under-developed provinces can have continuingly declining PHDI due to extractive activities, similar to oil- or mining-focused nations. Innovation-oriented provinces, such as Guangdong, have high PHDIs similar to European nations. We explore metric choice issues for PHDI and the need for approaches that incorporate the lag between capital stock accumulation and HDI – the stock-development problem.

ACCESS TO CREDIT AND PHYSICAL CAPITAL STOCK: A STUDY OF NON-FARM HOUSEHOLD ENTERPRISES IN NIGERIA

This study investigated the influence of access to credit on the physical capital stock of non-farm household enterprises in Nigeria. The study used the binary logistic regression technique and Nigeria’s 2018-19 General Household Survey data (Wave 4). We find that the influence of access to credit on the physical capital stock of nonfarm household enterprises in Nigeria is positive and significant. This implies that access to credit enhances the capacity of these enterprises to procure physical capital stock. Our results also indicate that expenditure on raw materials, profit, and years of operations are other key drivers of physical capital stock accumulation. Consequently, we conclude that there is a need for policies to enhance access to credit by non-farm household enterprises in Nigeria to strengthen their operations on a sustainable basis.

Weather and population size effects on water and sewer treatment costs: Evidence from Brazil

The provision of sanitation services generates investments, employment, and income; they contribute to human capital stock accumulation, and, therefore, to economic development. Recent studies suggest that climate change can increase sanitation costs, and it can be a constraint to emerging economies where institutional inefficiencies raise challenges to the universal supply of these services. We combined data of sanitation companies collected by the Brazilian government and the historical weather data from Xavier et al. (2015) generating a unique dataset between 1995 and 2016 to test the weather effects on sanitation costs. The results indicate that water treatment costs increase if the temperature rises, while sewer treatment costs decrease. We also found evidence that the migrating population from smaller to larger cities in Brazil can overload the sanitation infrastructure and increase the costs. Technical change estimates are -0.67% per year on average, indicating the non-sustainability of the sector in the long run.

Spatial economic linkages of economic growth and air pollution: developing an air pollution-multinational CGE model of China, Japan, and Korea

This paper analyzes spatial influences of national economic growth on trade and the emission of PM2.5 for three Northeast Asia countries—China, Japan, and Korea. An Air pollution-Multinational Computable General Equilibrium model is developed to integrate two environmental modules for PM2.5 emissions and premature mortality with a multinational economic model. Emission flows of PM2.5 are examined in terms of production-based emissions by the producer in the supply process and consumption-based emissions by the consumer in the demand process. The paper shows that capital stock accumulation in China has positive effects on increases in total trades as well as production-based and consumption-based emissions of PM2.5 among three countries. In contrast with these impacts, the supply growth of Japan and Korea through the capital accumulation could reduce total amounts of emissions of PM2.5 pollutants in the area because of increasing their outputs with low-emission technologies and substituting for Chinese imports. However, their increases for imports would cause premature deaths in China to rise, so two countries need to share economic costs for mitigating the emission of the PM2.5 in China.

The service-stock trap: analysis of the environmental impacts and productivity of the service sector in Hungary

Urbanization and the emerging share of the service sector in economic output may support the sustainability transition due to lower material input and emissions, while further accelerating the economic growth at the same time. Nevertheless, there are significant barriers to the transition. In this study, the service sector of Hungary and its four commercial sub-sectors have been analyzed with regard to their material requirement (input flows and stock) and greenhouse gas emissions (GHG) emissions utilizing EXIOBASE v3. General policy implications are also provided with special regard to costs, possible taxes and productivity of resources. The share of direct and indirect GHG emissions and material input generated by the sector was stable and moderate. A permanently improving trend is present in GHG, and material input intensity. Material stock accumulation in the service sector (capital stock), however, shows an ascending trend, and it has increased from 42% in 1995 to be 55% in 2015. Material input productivity of investments into services has increased until the economic crisis, then it starts to decline or stagnate; while overall stock productivity has decreased in two sub-sectors, and slow improvement was observable in sub-sectors of transportation and information and communication technology (ICT). Stock productivity of ICT and machinery capital stock was decreased dramatically in all sub-sectors. Four economic sub-sectors of the commercial services analyzed in this study have increased their capital stock from 130 to 288 Mt between 2000 and 2015. The exponential trend in material stock accumulation is an environmental issue with rising scientific concern and awareness, since it constitutes the basis of crucial waste management, resource scarcity and resource use challenges in the future. The current study indicates general reinforcement of the environmental pressure of material stock accumulation by the service sector. This phenomena was defined as the ‘service-stock trap’, which refers to the sign of a trade-off between the descending flow-type environmental impacts and ascending impacts of capital stock accumulation during the economic transition towards a service-based economy. As a promising way out of the trap, the resource tax was discussed in detail, which seems to be suitable for forming investment decisions of the business actors.

Acumulación de capital y crecimiento estatal en México: un análisis con datos panel

<p>En el presente texto se estudia el vínculo entre el crecimiento económico y<br />la acumulación del stock de capital industrial estatal mediante técnicas de panel, en el<br />periodo 1960-2012. El análisis se efectúa sobre dos momentos: el de industrialización<br />nacional (1960-1982) y el de las reformas estructurales (1983-2012). Los resultados<br />muestran una relación de largo plazo en ambos periodos, pero con el signo opuesto al<br />esperado en el último, lo cual sugiere que la desaceleración del capital industrial puede explicar la ralentización del crecimiento en las últimas tres décadas. Este resultado se confirma con la caída de la manufactura, así como de otros indicadores económicos. Los resultados de las pruebas de causalidad muestran bidireccionalidad entre ambas variables, evidenciando así un círculo virtuoso entre crecimiento y acumulación.</p>

Investigating the driving forces of China's carbon intensity based on a dynamic spatial model.

In extant literature on China's carbon intensity, economic growth is considered an important determinant. However, the corresponding policy implications are slightly weak in subsequent practice because economic growth is an outcome of many economic activities, such as technological progress and capital stock accumulation. Furthermore, spatial spillover effects are ignored when using regional datasets. As a result, this study uses the dynamic spatial model to analyze the driving forces of China's provincial carbon intensity over the period 2000-2014. Results indicate that both technological progress and capital stock accumulation are important measures to carbon intensity reduction. China's current industrialization, urbanization, and special energy structure exert a negative effect on the decline in carbon intensity. In addition, China's provincial carbon intensity also exhibits considerable spatiotemporal distribution characteristics. As such, the corresponding policy measures are presented.

An assessment of energy efficiency based on environmental constraints and its influencing factors in China.

The super-efficiency directional distance function (DDF) with data envelopment analysis (DEA) model (SEDDF-DEA) is more facilitative than to increase traditional method as a rise of energy efficiency in China, which is currently important energy development from Asia-pacific region countries. SEDDF-DEA is promoted as sustained total-factor energy efficiency (TFEE), value added outputs, and Malmquist-Luenberger productivity index (MLPI) to otherwise thorny environmental energy productivity problems with environmental constraint to concrete the means of regression model. This paper assesses the energy efficiency under environmental constraints using panel data covering the years of 2000-2015 in China. Considering the environmental constraints, the results showed that the average TFEE of the whole country followed an upward trend after 2006. The average MLPI score for the whole country increased by 10.57% during 2005-2010, which was mainly due to the progress made in developing and applying environmental technologies. The TFEE of the whole nation was promoted by the accumulation of capital stock, while it was suppressed by excessive production in secondary industries and foreign investment. The primary challenge for the northeast of China is to strengthen industrial transformation and upgrade traditional industries, as well as adjusting the economy and energy structure. The eastern and central regions of the country need to exploit clean- or low-energy industry to improve inefficiencies due to excessive consumption. The western region of China needs to implement renewable energy strategies to promote regional development.

Heterogeneity in social values and capital accumulation in a changing world

In a society characterized by a multitude of heterogeneous agents and a large number of possibly immaterial goods, each one having distinct social and personal values, we study the impact of these relative values on intergenerational capital accumulation, as a function of economic and social parameters such as capital mobility, productivity and personal and social values discrepancies. Each agent is modelled by a one-period production function and a two-period intertemporal utility. Agents live, produce and consume over one period, but optimize over two periods, so providing a remaining stock of goods for the next generation. This creates a dynamics in capital accumulation depending on social and individual values. A threshold appears in capital stock accumulation that depends on personal and social values’ volatilities, and below which the initial stock will be depleted. Whereas volatility in social values increases the threshold, impairing capital accumulation, adverse shocks in goods’ values may reverse the dynamics of the accumulation process. Finally, capital mobility specifically favors forerunners, but capital accumulation in one or several sectors may shift social values in their direction, at the expense of other sectors.

Trade, competitiveness and investment: an empirical assessment

ABSTRACTThe Eurozone crisis has exposed several weaknesses of the European Monetary Union economies. This paper aims to assess the impact on external competitiveness of an expansionary capital stock policy that could contribute to reduce the trade balance asymmetries within the EU and help European exporters to recover their competitive role in international markets. A policy action to increase capital stock accumulation through investment in selected European countries could generate a double dividend: increasing both price and nonprice competitiveness, so stimulating their competitive position as exporters, and consolidating the growth path of EU economy. The analysis employs a bilateral trade model built at INFORUM with several distinguishing characteristics: a comprehensive bilateral data set, econometric estimation of key parameters, and emphasis on sectoral details. Our findings show that a capital stock increase is effective in narrowing trade imbalances within EU. Heterogeneous effects are estimated for commodities in China and the US.

THE IMPACT OF NEW TRADE AGENDA TO MACROECONOMIC PERFORMANCE OF INDONESIA AND JAPAN IN SHORT AND LONG TERM

The swings of global trade in recent decades have been resulted from the global economic crisis and unfavorable condition of global situation. Deterioration of private demand -- as a result of economic crisis and increase of unemployment – has been the main reason of worsening global trade. This condition has, of course, affected economic performance of countries through trade channels. Furthermore, the recent trade agenda following to Trump administration has created another uncertainty to the world economy. This paper studies the impact of new trade agenda, which is represented by Trump’s plan on trade policy, to the world economy as well as to Indonesian and Japanese economy in particular. The analysis is based on computable general equilibrium of GTAP model version 6, with two scenarios: (i) Trump Trade Agenda when implementing 45 and 35 percent tariff to China and Mexico; (ii) Trade Hit List when imposing tariff to the 16 countries in the trade hit list. Impacts of both scenarios are examined in short run and long run. The results suggest that both scenarios in the short run will not create any significant effect to global economy as whole nor to Indonesian and Japan in particular. However, their impacts to the global economy, Indonesia, and Japan will be substantial in the long run. Therefore, Indonesia and Japan in particular should concern on providing sound economic policies to reduce the risk of new trade agenda to these economies in the long run. Some policy recommendation provided in this paper are: (i) Japan should focus on improving technological innovation to realize the implementation of society 5.0 and industry 4.0 as scheduled; (ii) Indonesia should facilitate more investment to its economy and provide more government investment to induce accumulation of capital stock in the future. Furthermore, efficiencies and technological adoption should also be main concern of the Indonesian government to induce productivity of the economy and help mitigate the global risks in the long run.

The Dynamics of the Real Sector Growth in Zambia

This article examines the main macroeconomic drivers of economic growth in Zambia, covering the period 1960–2013. These drivers have been identified by assessing the growth episodes that occurred during periods of high and low economic growth. The former episodes were driven by mineral booms; while low economic growth was driven by mineral recessions. The study concludes that the accumulation of capital stock, human capital development, international trade, the real exchange rate, and inflation are the main macroeconomic drivers of economic growth in Zambia. The performance of these macroeconomic drivers has also been influenced by the major policy reforms that the Zambian authorities have instituted, especially moving from a command economy driven by nationalist ideologies to a market-oriented economy. The study identifies three major challenges that could affect future economic growth prospects in Zambia. These include: dependence on mineral growth, low human capital development and income distribution, and the deteriorating balance-of-payment position during lean periods.

From Energy-Intensive to Innovation-Led Growth: On the Transition Dynamics of China's Economy

Whether China continues its current energy-intensive growth path or adopts a sustainable development prospect has significant implication for energy and climate governance. Building on a Ramsey-Cass-Koopmans growth model incorporating the mechanism of endogenous technological change and its interaction with fossil energy use and economic growth, this paper contributes to an economic exposition of China’s potential transition from an energy-intensive to an innovation-led growth path. We find that in China’s initial growth period the small amount of capital stock creates higher dynamic benefits of capital investment and incentives of capital stock accumulation rather than R&D-related innovation. Accumulation of energy-consuming capital stock along this non-innovation-led growth path thus leads to an intensive use of fossil energy - an energy-intensive growth pattern. To avoid this undesirable outcome, China’s social planner should consider locating a transition point to an innovation-led balanced growth path (BGP). When the growth dynamics reaches that transition point, China’s economy would embark on investment in physical capital and R&D simultaneously, and make a transition into the innovation-led BGP along which consumption, capital investment, and R&D have a balanced share. Also in this innovation-led BGP, consumption, physical capital stock, and knowledge stock all grow, fossil energy uses decline.

Environment, growth, and technological change in a two-country overlapping-generations model

This paper investigates the effects of a change in environmental abatement technology on the accumulation of capital stock and on the global environment in a two-country overlapping-generations model. Among other issues, we focus on a situation where abatement improves in only one country. With comparative static analysis, we derive the sufficient and necessary condition in the initial steady states for unilateral improvement in abatement technology to improve the two-country global environment. In addition, we examine the effects of changes in several technologies on capital stock and on the global environment.

The New Investment Paradigm?

This article in the Economic Insights series summarizes results from current Statistics Canada research on investment and capital stock accumulation. It reports on the study, Intangible Capital and Productivity Growth in Canada. Compiling information on wealth accumulation has been central to Statistics Canada’s activities since its inception. The wealth of the nation is a measure of its financial strength, international standing, and economic power. In 1915, Canada’s first Chief Statistician, Robert H. Coats, compiled Canada’s initial estimate of national wealth at the behest of the Borden Conservatives. He set the value of Canada at $16.3 billion. Since then, the practice of compiling national wealth estimates has continued, with current national balance sheet estimates placing Canada’s 2011 wealth at $6.9 trillion. Over time, the accuracy with which national wealth is estimated has improved, and the scope of assets examined has expanded. This process involved debate about which assets should be included, and how they should be measured.

Canada's Potential Growth: Another Victim of the Crisis

This study investigates the impact of the current financial crisis on Canada's potential GDP growth. Using a simple accounting framework to decompose trend GDP growth into changes in capital, labor services and total factor productivity, we find a sizeable drop in Canadian potential growth in the short term. The estimated decline of about 1 percentage point originates from a sharply decelerating capital stock accumulation (as investment has dropped steeply) and a rising long-term unemployment rate (which would raise equilibrium unemployment rates). However, over the medium term, we expect Canada's potential GDP growth to gradually rise to around 2 percent, below the pre-crisis growth rate, mostly reflecting the effects of population aging and a secular decline in average working hours.

Canada's Potential Growth: Another Victim of the Crisis?

This study investigates the impact of the current financial crisis on Canada's potential GDP growth. Using a simple accounting framework to decompose trend GDP growth into changes in capital, labor services and total factor productivity, we find a sizeable drop in Canadian potential growth in the short term. The estimated decline of about 1 percentage point originates from a sharply decelerating capital stock accumulation (as investment has dropped steeply) and a rising long-term unemployment rate (which would raise equilibrium unemployment rates). However, over the medium term, we expect Canada's potential GDP growth to gradually rise to around 2 percent, below the pre-crisis growth rate, mostly reflecting the effects of population aging and a secular decline in average working hours.

Technical Change, Investment and Energy Intensity

This paper analyses the role of different components of technical change on energy intensity by applying a Translog variable cost function setting with (short- run) fixed capital to the new EU KLEMS dataset for five selected EU countries (Denmark, Italy, Netherlands, UK and Spain). The framework applied represents an accounting of technical change components, comprising autonomous (disembodied) as well as technical change embodied in capital goods. It is extended in order to incorporate embodied technical change induced by energy prices by adding an equation for (physical) capital stock accumulation. The model can be used for explaining and tracing back the long-run impact of the interaction of prices, capital accumulation and technical change on energy intensity. The empirical results distinguish between industries with embodied technical change and industries with capital-energy complementarity.