Cent Of GDP Research Articles

An unemployment re-insurance scheme for the eurozone? Stabilizing and redistributive effects

This paper develops a decomposition framework to study the importance of different stabilization channels of an unemployment re-insurance scheme for the euro area. Running counterfactual simulations based on household micro data for the period 2000–21 and studying the effect of different trigger variables and activation rules, the paper finds that the re-insurance would have cushioned on average 7%–14% (3%–6%) of employment income losses through interregional (intertemporal) smoothing. The simulated re-insurance scheme would have been revenue-neutral at EA-19, but not at the member-state level. Average annual inpayments and payouts would have been below 0.1 per cent of GDP. A back-of-the-envelope calculation shows that the re-insurance could offset up to 18% of future output shocks. These results suggest that a re-insurance would significantly strengthen public risk sharing in the euro area.

Pensions as an Engine of Growth. An Approach to the Spanish Case, Based on the Sraffian Supermultiplier

ABSTRACT In this paper, following Cesaratto's lead (Cesaratto, [2005]. Pension Reform and Economic Theory: A Non-Orthodox Analysis. Cheltenham: Edward Elgar, especially chapters 6-8), we measure the impact of pensioners' spending on output and employment in the Spanish economy in 2021 by means of the Sraffian supermultiplier, taking pensioners' expenditure as a component of autonomous demand. To do so, we follow another lead, from Dejuán (Dejuan, [2023]. The Supermultiplier. A Cornerstone of the New Macroeconomics. Cheltenham: Edward Elgar, chapter 10), who suggests using the Leontief inverse of an extended SAM (social accounting matrix) that also includes both induced consumption and expansionary investment as a multisectoral supermultiplier, or multiplier-accelerator. The weight of PAYG pensions to people aged 65 or older in 2021 is 8 per cent of GDP, and their expenditure ‘puts in motion’ 6,7 per cent of total production and total employment (directly, indirectly, and hyper-indirect or induced). The government recovers 42 cents in taxes for each euro spent on pensions. Pensions in 2050 are sustainable, either raising taxes on profits or if exports grow pari passu with pensions at a rate below historical records.

R&D, Product and Process Innovation, and Firm Performance: A Case Study of the Chinese Firms

Alongside rapid economic growth, the Chinese economy has witnessed a notable increase in research and development (R&D) expenditure, escalating from 0.56 per cent of GDP in 1996 to 2.43 per cent in 2021. Recognising the significance of innovation in economic growth, this article utilises unique firm-level data from China for the year 2012 to investigate the influence of R&D, product innovation and process innovation on firm productivity. The findings suggest that R&D positively affects the performance of Chinese firms, as measured by either firm sales or sales per permanent full-time employee. Moreover, product innovation may have a detrimental impact on firm performance, whereas the impact of process innovation lacks robustness. JEL: D22, N65, O32

Threshold Analysis of Fiscal Policy Variables and Private Investment in Nigeria

This paper investigates the relationship between fiscal policy variables and private investment in Nigeria for the period 1970 – 2019 with a view to establishing the threshold level of each of the key fiscal policy variables in relation to private investment. The study employed annual and quarterly time series data covering the period 1970:1 to 2019:4 which were sourced in part from the Central Bank of Nigeria’s Statistical Bulletin and National Bureau of Statistics (NBS). Data collected were analyzed using econometric techniques. The variables used were private domestic investment, budget deficit, recurrent and capital government expenditure, oil and non-oil government revenue and public debt. The main findings are: First, there is an evidence of a double threshold effects of the fiscal balance. When exceeding a budget deficit level of 3.98 per cent of GDP or a fiscal surplus level of 3.2 per cent of GDP, private investment is negatively affected. Also, increase in government total expenditure beyond the third regime made private investment to become less productive. As regards public debt, the results revealed that private investment had the most positive impact on economic growth in the first regime of public debt. A resort to public debt beyond this level will make private investment less productive thereby inhibiting growth. The study therefore, concludes that government should be cautious in resulting to debt instruments to finance its deficit. It should also make a concerted effort to increase its expenditure especially in the provision of infrastructural facilities as this directly influence private investment decision positively.

Do MNEs Create Spillover Effects in Cuba?

In the past three decades, Cuba has extended opportunities for Multinational Enterprises (MNEs) to establish operations within its predominantly centrally planned economy. Many MNEs have seized this opportunity and established their presence in Cuba, resulting in FDI inflows reaching up to 2 per cent of GDP in certain years. In our paper, we aim to assess the impact of MNEs’ activity on local companies, with a specific focus on productivity spillover effects. Additionally, we analyze how institutional factors influence the strength of these effects. Our data collection involved conducting questionnaires and semi-structured interviews with MNEs operating in Cuba and experts on the Cuban economy. Our findings reveal that MNEs introduce new technology and knowledge to Cuba, thereby positively influencing the local development. We have confirmed the existence of vertical spillover effects, as certain MNEs provide direct assistance to local companies with whom they collaborate. The extent of these spillover effects is heavily contingent on Cuba’s institutional framework. Local regulations mandate that MNEs cooperate with local companies for various operations, such as expanding product distribution across the country, thus amplifying the impact. Conversely, spillover effects through labor mobility are limited, as there is a low rate of transition from MNEs to local companies among the local workforce. Stringent legal constraints further hinder interaction between MNEs and the Cuban private sector, thereby limiting the broader spillover effects.

DETOURS AND DELAYS: NAVIGATING THE PANDEMIC'S IMPACT ON INDIA'S TRANSPORT SECTOR AND TOURISM

The COVID-19 pandemic has had a profound impact on the Indian transport industry, affecting various sectors such as aviation, railways, road transport, and maritime. The nationwide lockdowns and travel restrictions imposed to curb the spread of the virus led to a significant decline in passenger traffic and freight movement, causing severe financial distress to the industry. This almost standstill in the movement of the people severely affected the Indian tourism industry which provides 7 per cent of GDP and 9 per cent of employment by 2019. The aviation sector witnessed a sharp decline in passenger traffic, leading to financial losses for airlines and airports. Many airlines were forced to suspend operations or reduce their workforce to survive. Similarly, the Indian Railways faced challenges due to the suspension of passenger trains, impacting revenue generation. The road transport sector also suffered due to the lockdowns, with restrictions on inter-state and intra-state movement affecting the movement of goods and passengers. The maritime sector faced challenges due to disruptions in global trade and port operations. To mitigate the impact of the pandemic, the Indian government announced various relief measures, including financial assistance, waivers, and restructuring of loans for the transport industry. The government also launched initiatives such as the Vande Bharat Mission to repatriate stranded Indians and the One Nation, One Card scheme for seamless travel across different modes of transport. By recognising the importance of the revival of tourism in India Indian Government announced many sops and reliefs to the tour operators, travel agents and transport organisations. Despite these measures, the road to recovery for the Indian transport industry remains challenging. The industry will need to adapt to the new normal by implementing safety measures, embracing digital technologies, and diversifying its operations to ensure resilience in future crises. KEYWORDS: Covid -19, Road transport, Railways, Civil aviation, Tourism

Economic Aspects of Australian Federation: Trade Restrictiveness and Welfare Effects in the Colonies and the Commonwealth, 1900–3*

Australian Federation in 1901 entailed the formation of a customs union among its formerly tariff‐autonomous colonies. Although the elimination of tariff barriers to intercolonial/interstate trade would have been welfare‐enhancing, Australia's common external tariff was set considerably higher than the tariffs on external goods imported by the pre‐Federation colonies, implying a welfare reduction. Using a dataset of 3,584 commodity‐ and colony‐disaggregated imports, this paper estimates trade restrictiveness indices and welfare losses for the Australian colonies and Commonwealth. Despite the high external tariff post Federation, the customs union produced a net static welfare gain conservatively estimated to have been 0.17 per cent of GDP.

Hotspots in the EU‐27 and Economic Consequences of the 2022 Spring‐Summer Drought

SummaryThe year 2022 will be remembered as a year of severe drought in Europe. Production losses on account of the drought from the six crops representing the most extensive harvested area may even have run to an estimated 13 billion euros in the EU‐27. Considering the ratio of the six crops in all croplands, the total revenue loss to cropland farming may have reached twice as much (25–30 billion euros). This figure indicates the magnitude of the challenge represented by climate change to the continent. While most of Europe suffered from severe drought in the spring and summer of 2022, the agricultural losses were region‐specific and were concentrated in the Western Mediterranean and Carpathian‐Balkan regions. Maize and sunflower suffered the highest losses, while data for wheat, barley, rapeseed, and rye showed an ambivalent picture. Losses in production of cropland farming associated with extremely high market prices have even reached 1–2 per cent of GDP in some countries in the Carpathian‐Balkan region. The paradox of last year was that despite drought hitting cropland farming severely, agriculture in the European Union has created a very high gross added value due to skyrocketing food prices.

Sustainable Innovation in the Canadian Agrifood Sector: Past, Present & Future

In order to remain globally competitive with sustainable innovations in agri-food, both the public and private sectors in Canada must increase investment and in the industry. Studies reveal that both sectors’ support for agri-food innovation has declined in recent years. To spur innovation and growth public funding should revert to previous levels, ideally reaching 0.10 per cent of GDP. Incentives such as tax relief, matching funds and enhanced protection of intellectual property rights could spur increased levels of private sector investment in innovation. In the past 50 years, innovation in agriculture has brought tremendous benefits to producers, processors and consumers. Successful innovations include genetically modified crops, large-scale cattle feeding operations and the adoption of no-till farming, which has reduced the traditional practice of summerfallowing fields. Still, with the demand for a secure global food supply and growing concerns about the environmental impacts of large-scale farming, the need for sustainable innovation in the agri-food sector is pressing. This paper offers three recommendations for policy-makers. First, public funding for agricultural research and development should be increased to prior levels. Next, the private sector needs more favourable conditions to foster investment in the agri-food industry. Last, if intellectual property rights are strengthened, innovating firms will be reassured that they can capture the economic benefits innovation creates.

The experiences of the economic transition in Central and Eastern Europe (1990-2000): The case of the Czech Republic, Slovakia and Poland

In the years 1989–1990, economic and political transition in Central and Eastern Europe coincided with the general crisis of state socialism. The transformation process meant the general liberalization (abolition of state subsidies and fixed prices etc.) of the economic system in the former state socialist countries, which coupled with opening their markets to foreign investors. There were substantial differences in the creation of a freemarket economy in the region. Whereas Poland applied the method of shock treatment, based on the concept of the Washington Consensus, Czechoslovakia followed a double policy by mixing the gradualist approach with “shock” rhetoric to avoid the negative impacts of the economic transition. Although the Central and Eastern European countries followed a different road in restructuring their economies in the 1990s, but by the turn of the millennium due to the privatisation of state-owned assets, private companies accounted for 70 per cent of GDP, whilst the share of the state sector was 30 per cent. This paper aims to highlight the experiences of the economic transformation in the Czech Republic, Slovakia and Poland by comparing its main features and stages. Besides macroeconomic stabilization, emphasis will be placed on analyzing the impacts of privatisation and its main consequences. Due to length constraints, the essay will not focus on the social impacts of the transition process in the region.

Relationship Between Problems of Women Laborers and Their Socio-economic Status

Agriculture, the single largest production endeavor in India, contributing about 18 per cent of GDP, is increasingly becoming a female activity. Women labourers play a crucial role in agriculture activities like main crop production, livestock production, horticulture, post-harvest operations etc. In spite of these, they face a number of problems such as exploitation, long working hours, unhealthy working conditions, insecurity of job, low wages, absence of decision making, male dominating society etc. Similarly the women labourers working in unorganized sector especially in urban areas are engaged in activities like domestic work, construction work, small trade brick making, coir and basket weaving, household industries etc. and they also face same types of problems. Keeping in view the above socioeconomic and psychological problems and factors affecting socio-economics problems, this present study was conducted among 120 women labourers in rural and urban communities of Hisar district of Haryana. The results revealed that majority of the respondents were in the age group of 20-35 years, belonged to scheduled caste, had nuclear families and were agricultural labours in rural areas and construction labourers in urban areas. Maximum number of the respondents from rural and urban areas had high level of social, economic and psychological problems. Regarding socio-economic problems and factors associated, it was found that caste, education, occupation of the family, income and socioeconomic status were significantly associated with problems of respondents.

International remittances and trade in sub-Saharan Africa: Does size matter? Evidence from endogenous dynamic panel threshold model

Remittance has recently become an essential capital inflow, particularly for developing economies. This has generated much research interest in understanding how remittances affect developing economies. There are, however, limited studies on remittances’ influence on trade. The study extends the existing body of knowledge by assessing whether the impact of remittances on trade depends on the size of inflows. As far as we know, the existing literature has not addressed this. The study period spans from 1990 to 2018, covering 32 sub-Saharan countries. Using an endogenous dynamic panel threshold model, the results reveal that although remittance deteriorates trade balance, the rate of deterioration diminishes after an estimated threshold of 2.35 per cent of remittances as a share of GDP. The results imply that when received in small amounts (below 2.35 per cent of GDP), remittances tend to stimulate consumption, leading to increased imports. However, when received in large quantities (above 2.35 per cent of GDP), remittances boost domestic investments leading to rising exports. The results are robust to alternate estimation techniques and measurement of remittances. Based on the findings, we recommend that policymakers in SSA integrate the volume of remittances received in their macroeconomic modelling frameworks.

Poverty – A Direct Threat to Global Environmental Degradation

The paper highlights that poverty has been a source of a severe threat to global environment. The earth is one but the world is not. For sustainable livelihood of human being, man is destroying the nature, without replacing it any more. Further, high mass of consumption had added fuel to fire. Certainly, majority of the populations in developing economies living within them, depend directly on natural resources. For many of these economies, primary product exports account for the vast majority of their export earnings, and one or two primary commodities make up the bulk of exports. Agricultural value added accounts for an average of 40 per cent GDP, and nearly 80 per cent of the labor force is engaged in agricultural or resources-based activities.For a sample of 76 developing economies from Africa, Asia and Latin America, the incidence of rural poverty rises as developing countries have more of their populations concentrated on fragile lands. Although the average poverty rate across all economies is 45.8 per cent, the rate falls 36.8 per cent for those countries with less than 20 per cent of their population in fragile environments. Much of developing economies are depending on natural resources. The incidence of poverty rises in these economies has been formed with population, whose livelihoods are concentrated on fragile lands. Generally, poor people are forced to overuse environmental resources. In India also all major rivers turned into polluted, one-third forest degraded into one-sixth. Too much logging, turned into loss of flora and fauna. Global countries realised that natural resources are limited, so that we have revive it by reducing population size, rejuvenation of land, reducing pollutions and support for regeneration of natural resources. Protection and promotion of environment is found as a need of the hour. Sustainable development is not as easy as we said. Renewal, recycle, reuse, reduce of resources are to be used regularly for ever green globe. Natural resources accounting, budgeting, management are to be made popular. So that poor can be elevated. Encouragement of political party on environment is badly needed.

Relationship between socio economic profiles of dairy farmers with extent of adoption of improved dairy farming practices in Kumaon division of Uttarakhand.

Livestock sector contributes 4.11 per cent GDP. According to United States Department Agriculture 2018, 80 million households were engaged in dairy farming and majority of them are small scale, marginal farmers. The dairy farming has been considered as a potential means of employment and socio-economic development for people in rural areas. Uttarakhand trails behind from highest milk producing states due to less growth rate in milk production focused should be given to the improved dairy farming to increase milk production and development of dairy industry. The present study was conducted in Kumaon division of Uttarakhand state to find out the relationship between socio economic profile of dairy farmers with their extent of adoption of improved dairy farming practices. Udham Singh Nagar district was selected as for the study. Total 100 respondents from these villages were selected. It was resulted that respondents with higher education, higher land holdings, higher dairy farming experience, higher annual income, higher milk production higher social participation, higher risk preference and higher economic motivation tends to have more extent of adoption of improved dairy farming practices as they are found to have a significant and positive relationship with extent of adoption of dairy farming practices.

On the Character and Causes of Inequality in Latin America

On the Character and Causes of Inequality in Latin America

COMPARATIVE ASSESSMENT OF MACROECONOMIC INDICATORS GROWTH PERFORMANCE BETWEEN INDIA AND NIGERIA

India and Nigeria were colonized by the British empire, got their independence within a given time range, and are among the largest growing economies among developing nations; they were ranked 1st and 3rd most populous among the common wealth countries respectively and both the countries houses significant population of malnourished, poor and food insecure people. The paper comparatively assessed the macroeconomic growth performance between the two countries using time series data that spanned from 1990-2020. Compound growth rate model was fitted to the data to confirm the trend of acceleration, deceleration or stagnation during the period. The results of the study revealed that mean values of GDP and GNI in US dollars at constant prices for India were higher than that of Nigeria by almost 7 times, while Nigeria`s per capita GDP was higher than that of India under the reference period. With respect to the GDP and per capita GDP growth rates, India recorded lower growth but more stable than Nigeria. Further, both the countries recorded highest GDP contributions from Service sector (46 per cent in India and 35 per cent in Nigeria). But the growth rate shows stability in Indian Service sector in contrast to the highest instability in agricultural sector. In Nigeria, on the other hand, agricultural sector got the highest growth contribution to GDP growth-though stagnant and instable, while service sector’s growth contribution to GDP growth was the lowest among other variables. It is recommended that increase budget share to agriculture through proper funding of research, credit support and extension service would help to repositioned agriculture back to its higher (of about 50 per cent) GDP contribution and compete vigorously with other economic sectors in income generation, employment opportunities and poverty reduction in both India and Nigeria.

Assessment of Factors Determining the Level of Private Credit in European Union Countries

Abstract This paper aims to evaluate the factors determining countries’ private credit level as well as to identify the differences of their effect during the periods when the levels of country private credit exceeded 100 percent of GDP or were below. The research methodology relies on two modifications of the multiple regression model with log differences of variables. Research results showed a negative impact of economic growth and a positive impact of consumer prices and housing prices on the level of private credit. It has also been found that in the first period when the level of private credit to GDP exceeds the 100 per cent threshold households tend to borrow more than in other periods. In the second model distinguishing between periods when the level of country’s private credit was below 100 per cent of GDP and when this level was reached or exceeded the research showed that the effects of economic growth do not differ between periods of high and low indebtedness, but the difference becomes apparent when assessing the impact of household income and expenditure, thus confirming the impact of the marginal financial depth.

Turning the UK into an innovation superpower

It was one of the real inflection points for the business when we got our first grant," recalls Neill Ricketts, the CEO of Versarien, an advanced materials business based in Cheltenham. "It shows a level of credibility to our investors and proves what you're working on is valid". Versarien's grant came from Innovate UK, one of the country's big sources of R&D funding, and an important lifeline for businesses like Versarien. Private companies, academic researchers and scientists working on cutting-edge technologies often rely on funding to pay for some or all of their R&D. Without this kind of support, most would run out of cash before being able to turn potentially revolutionary ideas into marketable products.Currently, however, the UK falls behind other comparable countries on R&D spending and support. World Bank data shows we spend about 1.7 per cent of GDP on R&D, compared with 2.2 per cent in France, 2.8 per cent in the USA, 3.1 per cent in Germany, 4.8 per cent in South Korea and 5 per cent in Israel (the highest spender).

Diversity in Unity: A Face off with Health Sector of BRICS Nations

The thirteenth summit of BRICS nations was held recently under the chairmanship of India on 9th September 2021. No doubt it was a moment of pride which needs to be celebrated on political front, as all the five BRICS nations reiterated their commitment of enhancing intra-BRICS cooperation under the three pillars - political and security, economic and financial, and cultural & people-to-people exchanges, but have we got holistic pride as well? No, as we are far behind from three nations of BRICS; Federation of Russia, China and Brazil if we look at our health sector. A pertinent question arises why we lack compatibility with BRICS nations in health sector? If we look at the period from 2005 to 2019 the current health expenditure (per cent of GDP) is well below in India in comparison to other BRICS nations. The low expenditure affects the health-related amenities in terms of availability of beds, physicians, nurses and mid-wives etc. Thus, it puts pressure on the general public to spend more on health. This in turn increases out-of-pocket expenditure of poor citizens. The paper tries to examine the expenditure incurred by BRICS nations on health sector and find out the health services such as; availability of beds, physicians, nurses and mid-wives etc. It also examines the relationship between health expenditure and out of -pocket expenditure. The study will try to evaluate how healthy are the citizens of BRICS nations on the basis of few selected indicators related to physical health. It will look at the pertinent question; where India stands amongst all the nations of BRICS? In the concluding part policy aspects will be discussed so that each member nation can improve in the areas where it lacks so that overall health of the citizens of BRICS nations can go up. This will not only strengthen the bond amongst these nations but also make them prosper more as healthy human resource is the backbone of any nation.

DEMAND AND SUPPLY PROJECTION OF CEREALS: CONSEQUENCE TO FOOD SECURITY IN INDIA AND NIGERIA

The paper presents demand and supply projection of major cereals for the year 2030, 2040 and 2050 for both India and Nigeria and the implication on food security challenge. The demand projections were computed using simple growth rate model under the assumptions of 6, 7 and 8 per cent GDP growth rate representing low-, moderate- and high-income growth. Results indicated that in both India and Nigeria increase in income do not cause any significant increase in the demand for cereals. It is concluded that India would be a self-sufficient in rice, wheat and maize with deficit in sorghum for the years 2030, 2040 and 2050 respectively. On the other hand, Nigeria would be plunging into a huge deficit in rice, wheat and a marginal surplus in maize and sorghum for the year 2030 with deteriorating deficits in the years 2040 and 2050 in rice, wheat, maize and sorghum respectively. In the study period, there would be surplus of cereals in the India with exception of sorghum; these prospects need to be strengthened and expand to sorghum through vigorous expansionary production programs as well ensure more availability, accessibility and affordability of cereal among poor families of India. For Nigeria to meet the future food requirements, the country shall have to either increase agricultural production, or depend on imports. As such, the paper suggests that the policy focus needs to be lunched, towards massive production, productivity enhancement in agriculture, through public investment in irrigation, credit facilities, research and extension.