Demand-pull Factors Research Articles

Profit produced by post-pandemic inflation: Evidence from an emerging economy

This paper focuses on the post-pandemic inflationary context, providing further details on how rising corporate profits contribute to the inflationary process in Türkiye. Using quarterly data from 2010 to 2022, we extend the existing literature by employing the Quantile ARDL method to assess the roles that both cost-push and demand-pull factors play in post-pandemic inflation. The chosen empirical strategy is motivated by the main objective of the study, as it allows us to quantify how the factors contributing to inflationary process differ when comparing periods of high inflation (higher quantiles) with periods of low inflation (lower quantiles). The empirical findings support the idea that the drivers of Turkish inflation are context-dependent, with specific causes emerging during inflationary episodes. The results show that cost-push factors, rather than demand-pull factors, are the main cause of the post-pandemic inflation surge in Türkiye. Our estimation results show that the coefficient for interest rates in Türkiye is only -0.42 %, while the corresponding figure for the profit share is 5.26 %, indicating that the effect of the profit share is 12 times greater than that of interest rate. We also find evidence of conflict and profit-driven inflation, confirming that the post-pandemic inflation surge in Türkiye is largely driven by cost-push factors and rising profits.

Effects of supply chain bottlenecks and fiscal stimulus on inflation dynamics in the COVID-19 pandemic era: a case of South Korea*

ABSTRACT We employ an augmented New Keynesian Phillips curve, integrating a global supply chain bottleneck index and comprehensive fiscal stimulus packages, to quantitatively examine the impact of these variables on inflation rates in South Korea using monthly time-series data from 2010 to 2023. The results reveal three key findings. First, the Global Supply Chain Pressure Index (GSCPI), serving as a proxy for global supply chain bottlenecks, has an overall statistically insignificant effect on inflation throughout the observation period. However, during the pandemic, its effect on inflation was statistically significant. Second, the detrended government stimulus packages, proxied by government transfers or government fixed investment, also demonstrated a significant escalating effect on inflation during the pandemic. These findings suggest that both cost-push and demand-pull factors contributed to recent inflation surges. Third, conventional determinants of inflation, such as expected inflation, the domestic output gap, and crude oil prices, consistently influence inflation, aligning with existing literature.

INFLATION IN INDIA: CAUSES AND REMEDIES

This paper delves into the intricate landscape of inflation in India, aiming to dissect its root causes and propose strategic remedies. As a developing economy, India grapples with the complexities of inflation, which significantly impacts economic stability and the standard of living. The causes are multifaceted, including demand-pull factors arising from rapid economic growth, cost-push elements driven by escalating production costs, and structural issues like inefficient agricultural practices. To address these challenges, the paper suggests a multifaceted approach encompassing monetary policy measures, fiscal reforms, and structural changes. By exploring international cooperation and learning from successful strategies in other countries, India can forge a path towards sustained economic growth with controlled inflation, fostering a prosperous and inclusive future.

Unexploited economic and environmental benefits from cultivated forages in Zambia

Abstract Livestock production is critical for improved food and nutrition security, sustainability of ecosystems, and resilience. Zambia, like many countries in sub-Saharan Africa, aspires to increase livestock’s contribution to the Gross Domestic Product and generate economic opportunities. Global environmental change, however, and the potential of ruminant production to exacerbate it, requires the implementation of innovative and pragmatic technologies for mitigation of and adaptation to the adverse effects of environmental change. Feeding of quality cultivated forages is one of the improved options to address such challenges, especially with dismal cultivation in the country. Cultivated forages provide multiple benefits including an increase in livestock productivity and soil health and reduced greenhouse gas emission intensity. In this study, the seed requirement of promising forage crops to offset the current ruminant roughage gap is estimated. The nutritional and economic benefits of including forages in beef and dairy rations, and associated projected greenhouse gas abatement, are presented. Consequently, the study proposes contextualized business models in Zambia based on both demand-pull factors and supply-push technologies. Zambia is land-linked with eight neighboring countries, and a member of both the Southern African Development Community and the Common Market for Eastern and Southern Africa trade blocks. Therefore, Zambia could produce forage seeds for domestic use as well as the regional market. In addition, it can be a hub for feed production for drier neighboring countries and locations with good livestock production, thereby benefiting the whole region.

The material basis of modern technologies. A case study on rare metals

Scientific progress in many technologies exploits new materials. The unique properties of a wide range of Rare Metals (RMs) make them key inputs to achieve the functionality of emerging technologies. The speed of technological progress can therefore be influenced by the availability of necessary RM materials. This paper discusses these relations and provides a first exploratory empirical analysis of the link between critical raw materials and frontier technological innovation. By text mining 5,146,615 USPTO patents during the period 1976–2015, we explore the dependence of new inventions of 13 key RMs, finding that the latter play an increasingly important role as the material basis of modern technologies: in the four decades observed, more than 1/10 patents rely on at least one RM. This dependence increases significantly over time and is particularly high for emerging technologies such as semiconductors, nanotechnology, and green energy. Further, we adopt a panel of 5644 technology subgroup-RM pairs to explore the impact of variations in RM supply. The results show that, controlling for science & technology push and demand-pull factors, innovation in RM-based technologies is positively associated with its supply conditions, contributing to the understanding of the shifts of critical materials' use in frontier technologies.

Green Technology Innovation under China’s New Development Concept: The Effects of Policy-Push and Demand-Pull on Renewable Energy Innovation

Green technology innovation meets the dual expectation of innovative development and green development perspectives. Under the canonical demand-pull and policy-push theories, a long-term mechanism for green technology innovation could be formed through upstream policy push and downstream demand-pull. Leveraging China’s regional carbon emission trading scheme pilots as a quasi-natural experiment, this paper examines the policy-push and demand-pull effects on innovation in renewable energy patents. The data pertain to the city-level renewable energy patents from 2000 to 2020. Based upon the triple difference-in-difference method, results suggest that both policy-push and demand-pull factors exert positive effects on innovation. This paper further explores the practical and theoretical implications of green technology innovation under the new development perspective.

Starting high school? On the origins of secondary education in Spain, 1857–1901

The development of modern educational systems radically altered the way knowledge and skills were transmitted. Yet, while elementary schooling rapidly expanded in late 19th and early twentieth centuries, secondary education struggled to find its way. This was also the case in Spain where, despite a growing demand, the provision of public secondary education during the second half of the 19th century was rather limited. As a result, private education, and especially that promoted by the Church, rushed to fill in the gap. Using a new database with municipal-level data, we examine what drove the expansion of private schools. As expected, demand-pull factors were critical. Still, the interplay between local forces and private agents should not be overlooked, especially as the State lacked the financial muscle and political will to broaden access to secondary education, whereas the Church was searching for a niche from which to consolidate its position in the nascent liberal society.

Does national culture matter for environmental innovation? A study of emerging economies

Environmental innovation is regarded as an essential tool to achieve the Paris Climate Conference agreement and Net Zero by 2050. Despite the extensive studies on the determinants of environmental innovation in developed countries, little attention has been paid to developing countries despite their dominance of emissions and different institutional characteristics. This paper fills the gap in the literature by investigating the determinants of environmental innovation in developing countries. In addition, the paper examines the role of national culture, an informal institutional factor, as a potential determinant of environmental innovation. Using 10,764 firm-year observations for a sample of 15 developing countries from 2015 to 2019, we find that environmental innovation is mainly driven by the demand-pull factor, rather than the technology-push factor, in developing countries. In addition, certain national cultural dimensions such as masculinity and long-term orientation enhance environmental innovation, while other dimensions such as power distance, individualism, uncertainty avoidance, and indulgence reduce it. The paper makes a theoretical contribution by extending the Porter Hypothesis towards institutional theory to include informal institutional factors (i.e. national culture) as a determinant of environmental innovation. The finding also suggests a rethink of policy in developing countries to focus more on demand-pull factors to promote environmental innovation.

Exploring energy transition in European firms: the role of policy instruments, demand-pull factors and cost-saving needs in driving energy-efficient and renewable energy innovations

ABSTRACT The transition toward more efficient and sustainable energy systems relies on the introduction by firms of innovations aimed at reducing the energy-environmental impact. In this paper, controlling for firms’ technological capabilities and taking into account the role of specific policy instruments, demand-pull factors and firms’ cost-saving needs, we carry out an in-depth analysis of the drivers motivating firms’ decision to engage in two main types of energy innovations, energy-efficient and renewable energy innovations, as compared to other environmental technologies. The empirical evidence, provided by using firm-level data from the Community Innovation Survey for different European countries, highlights the key role of firms’ cost saving needs as a motivation driving the introduction of both types of energy innovations, as well as of governmental subsidies and public procurement though only for renewable energy innovations. The influence of demand-pull factors is instead transversal between energy innovations and other eco-innovations.

Moving toward rice self-sufficiency in sub-Saharan Africa by 2030: Lessons learned from 10 years of the Coalition for African Rice Development

The Coalition for African Rice Development (CARD) was initiated as a policy framework with the aim of doubling rice production in sub-Saharan Africa (SSA) over the period from 2008 to 2018. This paper assesses the contribution of the CARD policy to rice production and forecasts the local rice supply and demand to provide a better understanding of the policies needed to attain rice self-sufficiency by 2030. A combination of the autoregressive integrated moving average method and counterfactual approach was adopted using rice statistical data from 23 countries in SSA. The results showed that the contribution of CARD to paddy rice production in 2018 was 10.2 million tons, equivalent to 74% of the target. This contribution resulted from increases in area and yield of 23% and 19%, respectively. However, the yield growth rate was not sustainable in almost two-thirds of countries. Investments in supply-push factors such as fertilizer and irrigation development, which were the focus in the past, have limited effects on rice production. We conclude that sustainable investments in demand-pull factors such as the private-led modern milling sector and contract farming development should be prioritized to achieve rice self-sufficiency in SSA.

Moving toward Rice Self-Sufficiency in Sub-Saharan Africa by 2030: Lessons Learnt from 10 Years of the Coalition for African Rice Development

The Coalition for African Rice Development (CARD) was initiated as policy framework with the aim of doubling rice production in sub-Saharan Africa (SSA) over the period from 2008 to 2018. This paper assesses the contribution of the CARD policy to rice production and forecasts the local rice supply and demand for a better understanding of the policies needed to attain rice self-sufficiency by 2030. A combination of the autoregressive integrated moving average method and counterfactual approach was adopted using rice statistical data from 23 countries in SSA. Results showed that the contribution of CARD to paddy rice production in 2018 was 10.2 million ton, equivalent to 74% of target. This resulted from the increasing of area and yield by 23% and 19%, respectively. However, yield growth rate was not sustainable in almost two-third of countries. Investments on supply-push factors such as fertilizer and irrigation development, which was the focus in the past, have less effect on the rice production. We conclude that sustainable investments on demand-pull factors such as private-led modern milling sector and contract farming development should be prioritized for achieving rice self-sufficiency in SSA.

Determinants of Producer Price versus Consumer price inflation in emerging Asia

This paper examines and compares the determinants of producer and consumer price inflation in ten Asian countries during 2000–2015. In this connection, we also investigate the pass-through of global oil prices, global food prices and exchange rates to domestic producer and consumer prices. The model applied here is based on the dynamic interrelationship between the price variables in the distribution chain. Our results show that external cost-push factors such as oil and food prices are more important in explaining producer price inflation than consumer one. For consumer prices, demand-pull factors still explain much of the variation in inflation. The pass-through of oil (food) prices tends to be higher in oil (food) exporting countries than in oil (food) importing countries. Government policy measures played a role in reducing or delaying the pass-through of oil and food prices to domestic prices. Lastly, exchange rate pass-through tends to be higher in countries with more flexible exchange rates.

Technology-push and demand-pull factors in emerging sectors: evidence from the electric vehicle market

Despite consensus on the mutual dependence of the technology-push and demand-pull factors, their interactions can depend on industry life cycles and domestic market status. Using patent and Google search traffic data, this study brings robust evidence supporting the hypothesis that technology development occurs ahead of market demand in the U.S. electric vehicle sector, while this is not the case in Germany. Market demand does not precede technology development in either country. This shows the importance of the technology-push factor and the role of the lead market in the electric vehicle sector. This study elaborates technology-push and demand-pull hypotheses with a focus on industry life cycles and domestic market status and contributes to the discussion on technology-push, demand-pull and mixed policies in emerging sectors.

Determinants of Consumer Price Inflation Versus Producer Price Inflation in Asia

We empirically examine and compare the determinants of producer and consumer price inflation in 10 Asian economies during 2000–2015. In this connection, we also investigate the pass-through of global oil prices, global food prices, and exchange rates to domestic producer and consumer prices. Overall, we find that cost-push factors such as oil and food prices are more important in explaining producer price inflation than consumer price inflation in the 10 Asian economies. On the other hand, for consumer prices, demand-pull factors still explain much of the inflation. Finally, we find that the pass-through of global oil prices, global food prices, and exchange rates tend to be higher for producer prices than consumer prices in Asia.

CHALLENGES OF DEVELOPMENT AND EMPLOYMENT GENERATION IN UP: THE ROLE OF FINANCIAL INSTITUTIONS

The distinguishing feature of UP’s economy is its regional imbalance. The state is divided into four economic regions – eastern, western, central and southern. All these regions have different climatic conditions, soil types and infra-structural development. The western region is the most prosperous region, despite some catching up by other regions in the 1970s and 1980s.The food grain yield per acre in the eastern and central regions is only 80% of the yield in the western region. And the west-to-east gap widens when one considers all crops: the west has witnessed greater diversification of output and has more area under high-value commercial crops. The southern region has made little progress. By the mid-1990s, crop value per acre in this region was on average less than half that for the western region. Consequently, the gap between the southern region and the rest of the state has continued to widen. Thus, to interpret the state as one economic unit in undifferentiated terms would be misleading. Given the wide variations in the level of development in the state, we can expect that factors driving employment growth would also vary. It is likely that in the more developed western region, diversification of employment away from agriculture would reflect the role of demand-pull factors generated by agricultural dynamism, while in the eastern, central and southern regions distress-push can play a role in increasing the volume of non-farm employment. After 1991, banks have become the spine for the development of the economy on all parameters in any state. The banking sector of Uttar Pradesh is predominated by nationalized banks like SBI, Regional Rural Banks, Foreign Banks and also Private Banks. But the state’s credit deposit ratio stands at 43.6% (March 2011), which is lower than the national level of 75.1% during the same period. High credit ratio represents effective functioning of banking sector. Again, there is diversification of credit ratio from one region to other.

International Labour Migration: Students Viewpoint

There are around 200 million people - about three percent of the world’s population living in a country not of their birth (Centre for Global Development (2008)). Economic systems that have failed to provide for people’s most basic survival needs, or that are simply unable to fulfil expectations of decent living standards, drive people to look outside their country of birth for a better life. The consequences of labour migration usually are assessed analysing migration theories. At present, there is no single, coherent theory of international migration, only a fragmented set of various theories. Scientists of various fields focus on slightly different but interrelated reasons for the decision to migrate. Economists emphasize that reasons leading to migration are motivated and sustained by three major types of influences: demand-pull factors in the destination area; supply-push factors in the origin area; network factors that link origin and destination areas. Sociologists describe a chain migration process: migration begets additional migration. The first person emigrating from the area sends information to those in the home country about jobs, housing, and schools in the new setting. Anthropologists emphasize changes in the standard of living and cultural reasons. First-hand accounts from new immigrants as well as media accounts of the country's standard of living entice people to immigrate to the new country for a better way of life. Psychologists describe importance of personality factors on migration decisions. Those who want to resettle in another country tend to be more work-oriented and to have higher achievement and power motivation, but lower affiliation motivation and family centrality, than those who do not want to leave their country of origin. Political scientists emphasize ethno political reasons. Countries may encourage emigration to ease ethnic conflict, or to establish presence in another country, by resettling particular ethnic groups voluntarily or involuntarily. Summarizing different migration theories and focus of various scientists, the authors of the paper present the model of decision making about migration. Based on this theoretical background empirical research was performed. Structured questionnaire survey was made in spring of 2010. 220 Lithuanian students participated in the poll. The analysis of empirical research showed that the main push and pull factors among surveyed Lithuanian students’ economic reasons were identified. 85 percent of respondents selected economic factor as the main reason for migration. Other factors affecting migration decision making were the following ones: political (32 percent), social-demographic (24 percent), cultural (23 percent) and demographical (15 percent). http://dx.doi.org/10.5755/j01.ee.22.5.971

Cost-push shocks and inflation: An empirical analysis from the economy of Pakistan

The present study was designed to examine the validity of cost-push and monetary diagnosis of inflation through empirical analysis. The empirical analysis had been conducted by using the technique of ordinary least square using annual data for the periods from 1971 to 1972 and 2006 to 2007. Before applying OLS, the stationarity of the data was checked by augmented Dickey Fuller (ADF) test. Regression analysis proves that cost-push factors are not less important than demand-pull factors in generating inflation. The monetary variables have significant impact on CPI (consumer price index), WPI (whole price index) and GDP. There is no single remedy to control inflation. Government should adopt multipurpose strategy such as improvement in tax and revenue structure, improving fiscal and monetary discipline, removing supply side disruptions, eradication of anti-competitive market practice. Key words: Cost push, monetary policy, inflation, Pakistan.

Modelling price determination in South Africa

South Africa has been faced with high inflation rates since the early 1970s. Despite continued monetary discipline the inflation target has not yet been met, highlighting South Africa’s price-vulnerability as a small open emerging economy and raising questions about the efficiency of monetary policy. The objectives of this paper are: (i) to analyse the influence of monetary policy on inflation in the small open emerging economy of South Africa, (ii) to highlight the channels other than monetary policy through which inflation can be influenced (iii) to analyse the influence of international prices and the exchange rate on inflation, (iv) to determine the role of the labour market on inflation, especially through wage-push dynamics and (v) to determine the role of demand-pull factors on inflation.

World Inflation and Recession and Their Impact on the Singapore Economy

World Inflation and Recession The world economy is undergoing an economic crisis with the international monetary system in disarray, stock markets slumping, inflation raging, and prospects of a major world-wide recession looming. Economists and policy-makers have been unable to reach consensus on what should be done. Traditionally, inflation is caused by demand-pull factors, that is, consumption and investment are in excess of the productive and import capacity of the economy, resulting in rising prices over a broad front. In such an inflationary situation, monetary and fiscal policy weapons are normally used. Restrictive monetary policy aims at reducing the level and rate of growth of money supply through central bank operations, increased reserve requirements, and higher interest rates. Fiscal policy aims at reducing aggregate demand through increased tax rates and budgetary surpluses or reduced budgetary deficits. The art lies in applying the proper dosage of monetary and fiscal measures so that inflation can be brought under control without triggering the economy into a recession and raising unemployment rates to levels which are socially and politically unacceptable. The inflation phenomenon which characterizes most industrial economies since World War , however, is due also to cost-push factors. The post-war world has seen changes in the economic environment of industrial countries with the rise of big business and organized labour so that prices and wages are both ad ministered and do not necessarily bear a close correspondence to the free market demand and supply situation. Hence, prices and wages tend to rise before full employment and full capacity utilization are reached. Such economies can be subject to both inflation and unemployment simultaneously, making possible situations of stagflation (inflation without growth) or even slumpflation (inflation with declining output). The policy solutions for cost-push inflation are somewhat more complex than for demand-full inflation. The use of macroeconomic monetary and fiscal policies to bring down the price level can also result in rising unemployment and economic stagnation or recession. But not to impose restrictive policies is to give the inflation psychology free rein and cause further escalation of prices and wages. Several industrial countries have adopted some form of price and wage control policy to supplement the traditional monetary and fiscal tools, but many such policies have been abandoned. There is no consensus on the efficiency of such a policy to resolve the dilemma of trade-off between inflation and unemployment. The magnitude and pervasiveness of the current global inflation and the seeming inability of governments to control it have made it a matter of acute concern to all. While the general cause of the current inflation may be attributed to the inflationary bias of modern governments in mixed enterprise economies because of their strong commitment to growth, development and full employment, the magnitude and