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Daily Archives: July 7, 2017

The equivalence of export subsidies and import tariff reductions in a macroeconomic model

July 7, 2017 2:50 pm

Bala Batavia, Parameswar Nandakumar
The Journal of Economic Asymmetries, Volume 15, June 2017
A general equilibrium macroeconomic model is used to study the equivalence of export subsidies and import tariff reductions in increasing export output. It is shown that the qualitative effects of both policies are the same; an import tariff reduction is an equally viable alternative for expanding exports. It is also seen that in a typical developing economy with a large nontradable goods sector, the import tariff reduction may well be a better choice in this regard. Hence, when striving for export expansion, developing countries and emerging market nations cannot afford to be lackadaisical in liberalizing imports. This observation may be also related to the argument that it is not possible to nurture a small pocket of advanced export industry in an economy shaded from competition and characterized by inefficiency and low productivity.
URL: http://www.sciencedirect.com/science/journal/17034949?sdc=1
Courtesy: Sciencedirect

Long run sustainability of current account balance of China and India: New evidence from combined cointegration

July 7, 2017 2:33 pm

Manoranjan Sahoo, M. Suresh Babu, Umakant Dash
Intellectual Economics, Volume 10, Issue 2,August 2016
This paper investigates the long run sustainability of current account balance (CAB) in two fast growing emerging economies of Asia, China and India, using annual data from 1980 to 2014. Sustainability of current account balance is analyzed by examining the long run equilibrium relationship between exports and imports of goods and services. We use the Bayer-Hanck (2013) combined cointegration test to examine the long run relationship between exports and imports. The results indicate that while China has a sustainable current account balance, India’s current account balance is not sustainable in the long run. Therefore, in terms of maintaining the growth momentum, India has to enhance the rate of growth of its exports while China has to maintain high levels of export growth, even in an era of sluggish global demand.
URL: http://www.sciencedirect.com/science/journal/18228011?sdc=1
Courtesy: Sciencedirect

Does easy availability of cash affect corruption? Evidence from a panel of countries

July 7, 2017 2:18 pm

Sunny Kumar Singh and Kaushik Bhattacharya
Economic Systems, Volume 41, Issue 2, June 2017
Using annual panel data of 54 countries for the period 2005-14, we examine whether currency in circulation, both aggregate and in large denominations, affects the level of corruption in a country. Standard panel data models suggest that the ratios of (i) aggregate currency in circulation to M1 and, (ii) large denomination banknotes to M1 are both statistically significant determinants of corruption. Tests for reverse causality within a panel Granger framework reveal a uni-directional causality of corruption with the first variable, but a bi-directional one with the second. These findings suggest that a limitation in the supply of high-denomination banknotes, inter alia, could be a tool to fight corruption, and bring to the fore the important role of payment systems, extending an earlier study by Goel and Mehrotra (2012). The results also highlight that, along with the government, the central bank of an economy can also play an important role in the fight against corruption.
URL: http://www.sciencedirect.com/science/journal/09393625?sdc=1
Courtesy: Sciencedirect

Caught up in policy gaps: distressed communities of South-Asian migrant workers in Little India, Singapore

July 7, 2017 11:03 am

Geerhardt Kornatowksi

Community Development Journal , Volume 52, Issue 1, January 2017

Migrant workers are considered to be a vital source of cheap labour to Singapore’s economy and their temporary status, including housing, work and personal time is highly regulated throughout their stay. While such regulatory practices have been the focus of several researches, less has been documented on those that have fallen out of direct reach of the migrant worker regime and their actual living conditions. This study examines in a relational manner the daily living conditions of South-Asian ‘regular workers’ (‘work permit holders’) in their workplace and ‘irregular workers’ (‘special pass holders’) who are seeking refuge due to trouble with their employer. Particular attention will be given to the distressed living conditions and how these are addressed by a non-governmental organization in Little India.

URL: https://academic.oup.com/cdj/issue/52/1

Courtesy: OUP