Impact Of Macroeconomic Policies Research Articles

English

  The literature on development problems of small scale industries in Ghana tend to paint a broad brush picture that may lend less relevance to development planning specific to local situations. Drawing on the case of small scale agro-processing industries, this paper examines geo-specific constraints that affect the development of small scale industries in the kassena-Nankana District of North Eastern Ghana. The findings show that industrialists have limited economic access to raw materials and energy supplies owing to environmental factors and the impact of macro-economic policies. There is also spatial inequity in the utilization of engine powered agro-processing technologies as a result of which many rural industrialists depend on man powered agro-processing technologies which have multiple adverse implications for production and growth. The main issues that underpin access to technology are the level of service development at the community level and accessibility to urban towns. There is also limited utilization of credit for capitalization owing to the lack of accessible credit facilities and ignorance while marketing of industrial products is constrained by climatic variability and poor debt recovery. Within the social setting, multiple household roles reduce time allocation of female industrialists to industrial production, while the lack of formal education and over burdened social expenditures present difficult managerial challenges to rural industrialists in general. The authors recommend the promotion of industrial development through a holistic approach to district development planning and management. Given the nature of the local economy, the authors stress the need to facilitate the development of the agricultural sector as pre-conditional and complimentary to the industrial development process.   Key words: Small-scale industries, agro-processing industries, industrial development, macro-economic policies, kassena-Nankana District.

The Impact of Macroeconomic Policies on Poverty and Income Distribution: Macro-Micro Evaluation Techniques and Tools - Edited by François Bourguignon, Maurizio Bussolo, and Luiz A. Pereira da Silva

The Impact of Macroeconomic Policies on Poverty and Income Distribution: Macro-Micro Evaluation Techniques and Tools - Edited by François Bourguignon, Maurizio Bussolo, and Luiz A. Pereira da Silva

A Small Macro-Econometric Model for Greece: Implications About the Sustainability of the Greek External Debt

This paper develops a small-scale macro-econometric model for Greece. The model will be used in order to examine the impact of macroeconomic policies on the real sector of the economy during the very difficult adjustment period that the Greek economy is currently facing. The model combines short-run Keynesian dynamics with a consistent neoclassical supply side. In this version potential output is given by a constant returns-to-scale Cobb-Douglas type production function. In most cases the short-run dynamics are modeled through an Error Correction Mechanism (ECM) which assumes the presence of adjustment costs in order to smooth-out the long-run equilibrium. A public sector side is also used in order to examine the impact of various shocks on public finance (specifically public debt).

Towards Poverty Reducing Macroeconomic Policies - Strategy Paper

There are substantial disagreements on the impact of macroeconomic policies on poverty. While past criticism of stabilization and adjustment programs have led to considerable changes in program implementation and program content, heated debates on the impact of macroeconomic policies on poverty continue to be at the center of the development debate. The debate so far has not only shown how little agreement there is on the impact of macroeconomic policies on poverty, it has also shown that there are considerable disputes on how to assess the impact of macroeconomic policies on poverty. With more and more data available, the binding constraint for a thorough analysis is more and more related to the lack of agreed standards, methodologies, and tools to assess the impact of macroeconomic policies on poverty. There are a variety of promising initiatives ongoing that develop quantitative tools that can be used to assess the impact of macroeconomic policies on poverty, especially within (a) the Network analyzing the Micro Impact of Macroeconomic and Adjustment Policies (MIMAP); (b) the World Bank; and (c) the International Food Policy Research Institute (IFPRI). Yet, these initiatives would benefit from closer coordination and cross-fertilization. Furthermore, more efforts are needed to overcome the limitations of currently existing computable general equilibrium (CGE) models and to consider alternative as well as complementary methodologies to CGE models to assess the impact of macroeconomic policies on poverty. In any case, it would be desired if some structured collaboration on such issues could be initiated among researchers around the globe in NGOs, think tanks, and many national and international development organizations, like the Bretton Woods Institutions, the Organisation for Economic Co-operation and Development (OECD), and a variety of United Nations organizations.

EVALUATING EMPLOYMENT POLICY PROGRAMS TO ALLEVIATE THE UNEMPLOYMENT: CASE STUDY OF EGYPT (In Arabic)

EVALUATING EMPLOYMENT POLICY PROGRAMS TO ALLEVIATE THE UNEMPLOYMENT: CASE STUDY OF EGYPT (In Arabic)

Labour market reforms and economic growth – the European experience in the 1990s

Purpose – The purpose of this paper is to reassess the relative impact of labour market regulation on economic performance. Inflexible labour markets combined with high welfare costs are often thought to be the main cause of low growth in Europe.Design/methodology/approach – This paper compares the impact of labour market regulation to that of macroeconomic policies (such as fiscal policy, monetary policy, macroeconomic cost management) and to that of investment into future growth (such as research, education and the diffusion of technology). We develop for this purpose a highly stylised model explaining economic growth; we suggest a synthetic measure of performance and use data for the US and Europe for the empirical test.Findings – The main result is that regulation impacts on growth, the impact of regulatory change is, however, less easy to demonstrate. The impact of macro economic policy can be demonstrated first by the more growth oriented monetary and fiscal policy in the US and the success of some ...

Impact of Macroeconomic Policies on Agricultural Prices

Existing empirical evidence on the impact of macroeconomic variables on agriculture remains mixed and inconclusive. This paper re-examines the dynamic relationship between monetary policy variables and agricultural prices using alternative vector autoregression (VAR) type model specifications. Directed acyclic graph theory is proposed as an alternative modeling approach to supplement existing modeling methods. Similar to results in other studies, this study's findings show that over the time period analyzed (1975–2000), changes to money supply as a monetary policy tool had little or no impact on agricultural prices. The primary macroeconomic policy instrument that affects agricultural prices is the exchange rate, which is shown to be directly linked to interest rate, a source of monetary policy shock.

Impacts of macroeconomic policies on the Latvian output and policy implications

The author applies the IS-MP-IA model (Romer, 2000) to examine short run economic fluctuations for Latvia. The results show that equilibrium GDP is negatively associated with the expected inflation rate and the US federal funds rate and positively influenced by real depreciation and stock prices due to the wealth effect, Tobin's q theory, and the balance-sheet effect. The impact of the government deficit/GDP ratio on output is positive but insignificant.

Impact of Regulated Price Adjustments on Price Variability in a Very Low Inflation Transition Economy: Case of Armenia

The impact of macroeconomic management (monetary policy) and administrative price adjustments on price variability in a low inflation economy characterized by relatively frequent administrative price adjustments is examined. Fluctuations of market determined prices, prices of agricultural goods in particular, are linked to the lack of synchronization between administrative price changes and monetary policy. If monetary policy does not account for expected changes in administrative prices, demand in free goods markets will shift causing fluctuation of prices for agricultural goods, because the supply of these goods is highly inelastic in Armenia. The findings contribute to a better understanding of agricultural price variability during 1998-2002. The impact of macroeconomic policy and structural adjustments on income distribution and rural poverty incidence are also examined. This research has immediate policy implications since Armenia will undergo major upward price adjustments for goods and services with regulated prices, which may have a negative impact on income distribution if aggregate demand management is unchanged.

Impacts of Macroeconomic Policies and Financial Market Performance on Output in Singapore: A VAR Approach

Applying the VAR model and using the Treasury bill rate as a monetary policy tool, we find that in the long run, output for Singapore responds positively to a shock to lagged own output and negatively to an innovation to the Treasury bill rate, government debt as a percent of GDP, appreciation of the Singapore dollar, stock prices, inflation rates, or world oil prices. The government debt ratio is the most important variable in explaining output variance. When real M2 is considered as a monetary variable, similar patterns are found except that output responds negatively to a shock to world oil prices. Because the magnitude of output response to a shock to some of these variables varies widely, the Singapore government needs to be cautious in pursuing monetary, fiscal, and exchange rate policies. The relatively stable exchange rate that has been maintained in recent times is appropriate because a depreciation of the Singapore dollar would be contractionary in the first two quarters and its long-term impacts may not be predicted as accurately as some would expect.

Impacts of macroeconomic policies on the Mexican output

This paper examines the potential effects of macroeconomic policies, stock market performance, exchange rate fluctuations, and other related variables on real GDP in Mexico. Extending the works by Arango and Nadiri (1981) and Bahmani‐Oskooee and Ng (2002), and applying comparative‐static analysis, possible effects of a change in the exchange rate or government debt on the equilibrium output are examined. All the variables have unit roots and are stationary in first difference. There is a long‐run stable relationship between real GDP and the right‐hand‐side variables. The GARCH(p,q) (Engle 2001) model is applied to estimate regression parameters. Real GDP is positively associated with real M2, government deficit spending, stock prices, U.S. output, and world oil prices, and negatively affected by the government debt ratio, peso depreciation, and the expected inflation rate. Therefore, fiscal policy to incur more debt needs to be pursued with caution, and both net exports and money demand need to be considered in studying the impact of exchange rate fluctuations on output.

Impacts of Macroeconomic Policies on Output in the Czech Republic: An Application of Romer's ISMP-IA Model

Extending Romer's IS-MP-IA model to include foreign trade and exchange rates and applying the GARCH method, the study came to the conclusion that real gross domestic product is negatively associated with the inflation rate, exchange rate depreciation, and the foreign interest rate and positively affected by government deficit spending and world output. Therefore, inflation targeting is an appropriate monetary policy, and the depreciation of the koruna would be harmful to the Czech economy even though it would help the export sector.

Impact of macro-economic policies on the sugar sector of Sri Lanka

An analysis was carried out to study the effect of changes in domestic prices of sugar, sugar import, tariff rates, interest rates and exchange rates together with mill capacities, per capita incomes and world sugar prices during the post-liberalisation period on the sugar sector of Sri Lanka to suggest policy guidelines for its development. The analysis was based on a simulation model which consisted of relationships of sugarcane area, cane and sugar production and imports, consumption and price of sugar determined using data from 1978 to 1999. The results indicated that domestic price of sugar was the most important economic variable in determining sugarcane area and hence cane and sugar production, and sugar consumption. Price of sugar had a positive relationship with cane area and an inverse relationship with sugar consumption. The domestic price was mainly determined by the world price which was highly volatile. Thus need for a rational pricing policy on sugar to benefit both sugar companies and consumers was emphasized. A sugar pricing policy based on an efficiency price and a mechanism to insulate the effects of fluctuations of world price on the local price to offer a stable price to both sugar companies and consumers together with offering an incentive for improving sugarcane processing efficiencies and a component for ensuring a revenue for government was suggested.

The impact of macroeconomic policies on the distribution of income

The impact of macroeconomic policies on the distribution of income

Exports of African manufactures: macro policy and firm behaviour

Macro policy has changed the real exchange rates for African countries dramatically in the 1990s. In this paper the possible impact of macroeconomic policy on firms in the manufacturing sector is considered based on a panel survey of such firms in Cameroon. Kenya, Ghana and Zimbabwe. The data show that most large African manufacturing firms do export, but most do not specialize in exporting. An export equation is estimated both for the propensity of the firms to export and the percentage of output exported. It is shown that a stable export function can be estimated for all four countries over the three rounds of the survey. While there is no evidence that real devaluations have effected a general rise in manufactured exports there is evidence from the surveys of a rise in the percentage of output exported from the Cameroon. Reasons for the lack of a general response to macro policy are suggested. In the Cameroon, large firms did increase their propensity to export. Understanding the links between macro policy and firm performance may require an understanding of how such policies impact on different types of firms.

Introductory Overview: Development Strategies, Agricultural Policies and Agricultural Development in Southeast Asia

The objective of this volume is to depict and analyse the impact of recent macroeconomic reforms on agricultural development in the transi tional economies of mainland Southeast Asia (TEMSEA) such as Cambodia, Laos, Myanmar and Vietnam; and to compare their experiences with those of other more developed market econo mies in Southeast Asia where agriculture plays a very significant role in the economy such as Indo nesia, Malaysia, Philippines and Thailand. Many studies have been done on the economic and social impact of macroeconomic policies on agriculture and rural people in developing coun tries. Bautista and Valdes (1993), Berg (1988), Demery (1987), Eicher and Staatz (1994), Green and Vokes (1997), Hazel (1987), James et al (1987), Krueger et al (1988), Hamid (1995), and UNDP (1989) are among more recent studies. However, the studies on Southeast Asian countries in the light of the latest political developments have not been done extensively. In this aspect, it is hoped that this volume will serve to fulfill this purpose. Before presenting the articles on country stud ies, it is felt that brief background information and discussion regarding the theme of the volume should be presented. Hence this introduction is divided into three sections: the first section focuses on salient features of Southeast Asian agriculture, the second discusses the impact of development strategies and macroeconomic poli cies on the agricultural sector, and the overview of the country studies along with the conclusion is presented in the final section.

The impact of macroeconomic policies in an oligopolistic economy with entry

SummaryThis paper examines the impact macroeconomic policies in a system where the product market is modelled as an oligopolistic supergame in which potential entrants incur sunk entry costs. It is shown that policies which affect the interest rate, influence both the degree of competition in the industry and the structure of the industry. Moreover, it is demonstrated that when sunk entry costs are introduced in to the model firms respond in an asymmetric manner to policy changes. These results suggest that the economy may exhibit hysteresis.

Macroeconomic policies in a supergame oligopolistic economy

This paper examines the impact of macroeconomic policies in a general equilibrium system where the product market is modelled as an oligopolistic supergame. It is shown that policies which affect the interest rate, influence the degree of competition and hence the level of output in the economy. The analysis reveals that some macroeconomic policies may have perverse and counter intuitive effects in the system.

Macroeconomic policy, output, and inflation in the former Czechoslovakia: Some evidence from the VAR analysis

Both macroeconomic policy and structural adjustment factors influenced the dynamics of output and inflation in the former Czechoslovakia during the first phase of its transition from central planning to markets. The results of VAR analysis indicate that, following price liberalization, the impact of structural adjustment processes on the level of output was somewhat stronger than the impact of macroeconomic policy. Moreover, it seems likely that a "looser" macroeconomic policy—advocated by many as a countermeasure to a large decline in industrial production—would only worsen the situation, bringing both higher inflation and a larger decline in industrial production.

The Impact of Macroeconomic Policies on Income Distribution: An Empirical Study of the Philippines

There has been a growing awareness of the income distribution dimension of macroeconomic policies. This paper studies this issue empirically considering the case of the Philippines and using data available from integrated surveys of households. After estimating a reduced form equation it was found that underemployment inflation and government spending worsen income distribution while productivity gains the real interest rate and the real exchange rate were found to improve distribution. A similar pattern emerges when the effects of these variables on the absolute incidence of poverty are estimated. (EXCERPT)