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Author: Naafey Sardar
Publisher:
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Languages : en
Pages :
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This dissertation consists of three essays. The first essay estimates the difference in the response of non-gasoline consumption spending to gasoline expenditure shocks across recessions and expansions. Using a nonlinear structural VAR (SVAR) model estimated on quarterly U.S. data for the period 1973-2018, we find that shocks to gasoline expenditures are followed by a much larger reduction in consumption if the shock occurs during a recession than if it occurs in an expansion. We also find a big difference in the response of personal savings to a gasoline expenditure shock depending on whether the economy is in a recession or expansion. This points to precautionary saving behavior as a source of the asymmetry in the response of consumption. We conclude that consumption forecasts should account for this asymmetry. The second essay asks whether El Nino-Southern Oscillation (ENSO) has asymmetric impacts on U.S. food and agricultural stock prices. Using weekly data from 1990 through 2019, we find support for the hypothesis that food and agricultural stock prices respond asymmetrically to ENSO shocks. In particular, we provide evidence that El Nino shocks typically decrease or have no effect on U.S. food and agricultural stock prices, whereas La Nina shocks generally increase prices. Our results are robust to a variety of robustness checks. The third essay estimates the effect of the 1999-2007 oil price spike on U.S. manufacturing employment. Using local labor market data, we estimate the change in U.S. manufacturing employment that can be explained by oil price movements that can plausibly be considered exogenous with respect to the U.S. economy. Our estimates suggest that the oil price spike may have been responsible for the movement of more than two million workers out of the manufacturing sector. When controlling for the effect of the oil price spike on manufacturing employment, the effect of import competition from China found by Autor, Dorn, and Hansen (2013) falls by more than 20%, with the estimated effect on less-educated workers declining by 26%.
Author: Naafey Sardar
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This dissertation consists of three essays. The first essay estimates the difference in the response of non-gasoline consumption spending to gasoline expenditure shocks across recessions and expansions. Using a nonlinear structural VAR (SVAR) model estimated on quarterly U.S. data for the period 1973-2018, we find that shocks to gasoline expenditures are followed by a much larger reduction in consumption if the shock occurs during a recession than if it occurs in an expansion. We also find a big difference in the response of personal savings to a gasoline expenditure shock depending on whether the economy is in a recession or expansion. This points to precautionary saving behavior as a source of the asymmetry in the response of consumption. We conclude that consumption forecasts should account for this asymmetry. The second essay asks whether El Nino-Southern Oscillation (ENSO) has asymmetric impacts on U.S. food and agricultural stock prices. Using weekly data from 1990 through 2019, we find support for the hypothesis that food and agricultural stock prices respond asymmetrically to ENSO shocks. In particular, we provide evidence that El Nino shocks typically decrease or have no effect on U.S. food and agricultural stock prices, whereas La Nina shocks generally increase prices. Our results are robust to a variety of robustness checks. The third essay estimates the effect of the 1999-2007 oil price spike on U.S. manufacturing employment. Using local labor market data, we estimate the change in U.S. manufacturing employment that can be explained by oil price movements that can plausibly be considered exogenous with respect to the U.S. economy. Our estimates suggest that the oil price spike may have been responsible for the movement of more than two million workers out of the manufacturing sector. When controlling for the effect of the oil price spike on manufacturing employment, the effect of import competition from China found by Autor, Dorn, and Hansen (2013) falls by more than 20%, with the estimated effect on less-educated workers declining by 26%.
Author: Mark Alan Melichar
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
In the first chapter I study the effects of oil price shocks on economic activity at the U.S. state-level, an innovative feature of this dissertation. States which rely more heavily on manufacturing or tourism are more adversely affected by adverse oil price shocks, while states which are major energy producers either benefit or experience insignificant economic changes from historically large oil price increases. Additionally, oil price increases from 1986 to 2011 have not impacted state-level economies to the same degree as increases from 1976 to 1985. This discrepancy can be attributed to a fundamental change in the structure of the U.S. economy, for example, a declining manufacturing sector or an increase in the efficiency with which energy is used in the production process. In the second chapter I explore the effects of alternative measures of energy price shocks on economic activity and examine the relative performance of these alternative measures in forecasting macroeconomic activity. The alternative energy prices I consider are: gasoline, diesel, natural gas, heating oil and electricity. I find that alternative measures of energy price shocks produce different patterns of impulse responses than oil price shocks. The overwhelming evidence indicates that alternative energy price models, excluding a model containing gasoline prices, outperforms the baseline model containing oil prices for many states, particularly at short-to-mid forecast horizons. In the third chapter, which is coauthored with Lance Bachmeier, we determine whether accounting for oil price endogeneity is important when predicting state-level economic activity. We find that accounting for endogeneity matters for in-sample fit for most states. Specifically, in-sample fit would be improved by using a larger model which contains both regular oil price and endogenous oil price movements. However, we conclude that accounting for endogeneity is not important for out-of-sample forecast accuracy, and a simple model containing only the change in the price of oil produces equally accurate forecasts. Accounting for endogeneity is particularly important in an environment in which rising oil prices were caused by a growing global economy, such as in the years 2004-2007.
Author: Rainer Walz
Publisher: Springer Science & Business Media
ISBN: 3790820784
Category : Business & Economics
Languages : en
Pages : 172
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Book Description
In its latest Assessment Report, the Intergovernmental Panel on Climate Change (IPCC, 2007) projects that without further action the global average surface t- perature would rise by a further 1. 8–4. 0°C until the end of this century. But even if the rise in temperature could be limited to the lower end of this range, irreversible and possibly catastrophic changes are likely to occur. Consequently, the protection of the earth’s atmosphere requires substantial efforts to reduce CO and other green- 2 house gas emissions – especially in countries with very high per capita emissions. To limit the imminent rise in temperature, in the Kyoto-Protocol, the European Union has committed itself to reducing the emissions of greenhouse gases by 8% up to 2008–2012 compared to 1990 levels. Within the EU burden sharing agr- ment, some countries have to achieve even higher emissions reductions. Germany was assigned a reduction target of 21%. The entry into force of the Kyoto Protocol in February 2005 marks a first step towards meting global climate targets, but more ambitious action to reduce greenhouse gas emissions is needed after 2012, when the Kyoto targets expire. Under German presidency, the EU has committed itself to unilaterally reduce its greenhouse gas emissions until 2020 by 20%. In case a Post- Kyoto agreement can be reached, the EU reduction target would be 30% (CEU, 2007).
Author: Matthew E. Kahn
Publisher: International Monetary Fund
ISBN: 1513514598
Category : Business & Economics
Languages : en
Pages : 59
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We study the long-term impact of climate change on economic activity across countries, using a stochastic growth model where labor productivity is affected by country-specific climate variables—defined as deviations of temperature and precipitation from their historical norms. Using a panel data set of 174 countries over the years 1960 to 2014, we find that per-capita real output growth is adversely affected by persistent changes in the temperature above or below its historical norm, but we do not obtain any statistically significant effects for changes in precipitation. Our counterfactual analysis suggests that a persistent increase in average global temperature by 0.04°C per year, in the absence of mitigation policies, reduces world real GDP per capita by more than 7 percent by 2100. On the other hand, abiding by the Paris Agreement, thereby limiting the temperature increase to 0.01°C per annum, reduces the loss substantially to about 1 percent. These effects vary significantly across countries depending on the pace of temperature increases and variability of climate conditions. We also provide supplementary evidence using data on a sample of 48 U.S. states between 1963 and 2016, and show that climate change has a long-lasting adverse impact on real output in various states and economic sectors, and on labor productivity and employment.
Author: H.G. Huntington
Publisher: Elsevier
ISBN: 1483295451
Category : Business & Economics
Languages : en
Pages : 350
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Book Description
Large-scale macroeconomic models have been used extensively to analyze a wide range of important economic issues. They were originally developed to study the economy's response to monetary and fiscal policies. During the 1970s these models were expanded and revised to track the inflationary processes and to incorporate key energy variables so that they could be used to examine the impacts of energy price shocks.This study compares the responses of 14 prominent macroeconomic models to supply-side shocks in the form of sudden energy price increases or decreases and to policies for lessening the impacts of price jumps. Four energy price shocks were examined: oil price increases of 50 and 20 percent, an oil price reduction of 20 percent, and an 80 percent increase in domestic natural gas prices. Five policy responses were considered for offsetting the GNP impacts of the larger oil price increase: monetary accommodation, an income tax rate reduction, an increase in the investment tax credit for equipment, a reduction in the employer's payroll tax rate, and an oil stockpile release.The study was conducted by a working group comprised of about 40 modelers and potential model users from universities, business, and government. As in previous EMF studies, the group pursued two broad goals. Firstly, they sought to understand the models themselves by identifying important similarities as well as structural differences. Secondly, they sought to use the models to sharpen their understanding of energy shocks and of the related policy issues. Their conclusions appear as the first chapter in this volume, the remaining chapters providing more technical treatment of the key structural differences among the participating models as well as their use for evaluating energy policies.This volume is addressed particularly to those interested in the energy shock issue, as well as to those with a broader interest in macroeconomic models and policies.
Author: Thiemo Fetzer
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Author: Mr. Kangni R Kpodar
Publisher: International Monetary Fund
ISBN: 1616356154
Category : Business & Economics
Languages : en
Pages : 34
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This paper investigates the response of consumer price inflation to changes in domestic fuel prices, looking at the different categories of the overall consumer price index (CPI). We then combine household survey data with the CPI components to construct a CPI index for the poorest and richest income quintiles with the view to assess the distributional impact of the pass-through. To undertake this analysis, the paper provides an update to the Global Monthly Retail Fuel Price Database, expanding the product coverage to premium and regular fuels, the time dimension to December 2020, and the sample to 190 countries. Three key findings stand out. First, the response of inflation to gasoline price shocks is smaller, but more persistent and broad-based in developing economies than in advanced economies. Second, we show that past studies using crude oil prices instead of retail fuel prices to estimate the pass-through to inflation significantly underestimate it. Third, while the purchasing power of all households declines as fuel prices increase, the distributional impact is progressive. But the progressivity phases out within 6 months after the shock in advanced economies, whereas it persists beyond a year in developing countries.
Author:
Publisher:
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Category :
Languages : en
Pages : 208
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Author: Stephane Hallegatte
Publisher: World Bank Publications
ISBN: 1464806748
Category : Business & Economics
Languages : en
Pages : 227
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Book Description
Ending poverty and stabilizing climate change will be two unprecedented global achievements and two major steps toward sustainable development. But the two objectives cannot be considered in isolation: they need to be jointly tackled through an integrated strategy. This report brings together those two objectives and explores how they can more easily be achieved if considered together. It examines the potential impact of climate change and climate policies on poverty reduction. It also provides guidance on how to create a “win-win†? situation so that climate change policies contribute to poverty reduction and poverty-reduction policies contribute to climate change mitigation and resilience building. The key finding of the report is that climate change represents a significant obstacle to the sustained eradication of poverty, but future impacts on poverty are determined by policy choices: rapid, inclusive, and climate-informed development can prevent most short-term impacts whereas immediate pro-poor, emissions-reduction policies can drastically limit long-term ones.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1463931174
Category : Business & Economics
Languages : en
Pages : 45
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This paper studies the impact of the level and volatility of the commodity terms of trade on economic growth, as well as on the three main growth channels: total factor productivity, physical capital accumulation, and human capital acquisition. We use the standard system GMM approach as well as a cross-sectionally augmented version of the pooled mean group (CPMG) methodology of Pesaran et al. (1999) for estimation. The latter takes account of cross-country heterogeneity and cross-sectional dependence, while the former controls for biases associated with simultaneity and unobserved country-specific effects. Using both annual data for 1970-2007 and five-year non-overlapping observations, we find that while commodity terms of trade growth enhances real output per capita, volatility exerts a negative impact on economic growth operating mainly through lower accumulation of physical capital. Our results indicate that the negative growth effects of commodity terms of trade volatility offset the positive impact of commodity booms; and export diversification of primary commodity abundant countries contribute to faster growth. Therefore, we argue that volatility, rather than abundance per se, drives the "resource curse" paradox.
