The COVID-19 crisis has had a tremendous economic impact for all countries. Yet, assessing the full impact of the crisis has been frequently hampered by the delayed publication of official GDP statistics in several emerging market and developing economies. This paper outlines a machine-learning framework that helps track economic activity in real time for these economies. As illustrative examples, the framework is applied to selected sub-Saharan African economies. The framework is able to provide timely information on economic activity more swiftly than official statistics.
This paper assesses the impact of climate-related disasters on medium-term growth and analyzes key structural areas that could substantially improve disaster-resilience. Results show that (i) climaterelated disasters have a significant negative impact on medium-term growth, especially for sub-Saharan Africa; and (ii) a disaster’s intensity matters much more than its frequency, given the non-linear cumulative effects of disasters. In sub-Saharan Africa, electrification (facilitating irrigation) is found to be most effective for reducing damage from droughts while improved health care and education outcomes are critical for raising resilience to floods and storms. Better access to finance, telecommunications, and use of machines in agriculture also have a significant impact.
Climate-induced disasters are causing increasingly frequent and intense economic damages, disproportionally affecting emerging markets and developing economies (EMDEs) relative to advanced economies (AEs). However, the impact of various types of climate shocks on output growth and fiscal positions of EMDEs is not fully understood. This research analyzes the macro-fiscal implications of three common climate disasters (droughts, storms, and floods) using a combination of macroeconomic data and comprehensive ground and satellite disaster indicators spanning the past three decades across 164 countries. Across EMDEs, where agriculture tends to be the principal sector, a drought reduces output growth by 1.4 percentage points and government revenue by 0.7 percent of GDP as it erodes the tax bases of affected countries. Meanwhile, likely reflecting limited fiscal space to respond to a disaster, fiscal expenditure does not increase following a drought. A storm drags output growth in EMDEs, albeit with negligible impact on fiscal revenue, but government expenditure increases due to reconstruction and clean-up efforts. We find only limited impact of localized floods on growth and fiscal positions. In contrast, AEs tend to experience negligible growth and fiscal consequences from climate-induced shocks. As these shocks have much more detrimental effects in EMDEs, international support for disaster preparedness and climate change adaptation play a crucial role for these countries to confront climate change.
This paper examines whether the coordinated use of macroprudential policies can help lessen the incidence of banking crises. It is well-known that rapid domestic credit growth and house price growth positively influence the chances of a banking crisis. As well, a crisis in other countries with high trade and financial linkages raises the crisis probability. However, whether such “contagion effects” can operate to reduce crisis probabilities when highly linked countries execute macroprudential policies together has not been fully explored. A dataset documenting countries’ use of macroprudential tools suggests that a “coordinated” implementation of macroprudential policies across highly-linked countries can help to stem the risks of widespread banking crises, although this positive effect may take some time to materialize.
Quarterly GDP statistics facilitate timely economic assessment, but the availability of such data are limited for more than 60 developing economies, including about 20 countries in sub-Saharan Africa as well as more than two-thirds of fragile and conflict-affected states. To address this limited data availablity, this paper proposes a panel approach that utilizes a statistical relationship estimated from countries where data are available, to estimate quarterly GDP statistics for countries that do not publish such statistics by leveraging the indicators readily available for many countries. This framework demonstrates potential, especially when applied for similar country groups, and could provide valuable real-time insights into economic conditions supported by empirical evidence.
Macroprudential policy in Europe aligns with the objective of limiting systemic risk, namely the risk of widespread disruption to the provision of financial services that is caused by an impairment of all or parts of the financial system and that can cause serious negative consequences for the real economy.
The most damning criticism of markets is that they are morally corrupting. As we increasingly engage in market activity, the more likely we are to become selfish, corrupt, rapacious and debased. Even Adam Smith, who famously celebrated markets, believed that there were moral costs associated with life in market societies. This book explores whether or not engaging in market activities is morally corrupting. Storr and Choi demonstrate that people in market societies are wealthier, healthier, happier and better connected than those in societies where markets are more restricted. More provocatively, they explain that successful markets require and produce virtuous participants. Markets serve as moral spaces that both rely on and reward their participants for being virtuous. Rather than harming individuals morally, the market is an arena where individuals are encouraged to be their best moral selves. Do Markets Corrupt Our Morals? invites us to reassess the claim that markets corrupt our morals.
This book looks into four areas of our world's international security crisis: the growing threat of America's homegrown jihadists, the continuing rise of terrorism, the causes of gross violations of human rights, and the pervasiveness of civil war. When American jihadists join such international terrorist organizations as the Islamic State of Iraq and Syria and Al Qaeda, the danger to security and stability is often magnified on both global and domestic fronts. The global rise of terrorism in turn causes a deterioration in the quality of human rights for politically disadvantaged people or minority groups within a national territory; meanwhile, the internal crisis created by terrorist violence and human rights violations can expedite the development of civil war, which is likely to endanger domestic and international stability. Taking a consistent theoretical and empirical approach, Emerging Security Challenges: American Jihad, Terrorism, Civil War, and Human Rights explicates the relationships among these four closely related areas of concern for national security. Each chapter presents systematic, empirical evidence of security trends for more than 100 sample countries, determined using the most current statistical methods. Given that security studies should provide practical policy recommendations, this book also offers potentially effective policy suggestions at the end of each chapter.
This book addresses a range of issues surrounding the search for scientific truths in the study of international conflict and international political economy. Unlike empirical studies in other disciplines, says Seung-Whan Choi, many political studies seem more competent at presenting theoretical conjecture and hypotheses than they are at performing rigorous empirical analyses. When we study global issues like democratic institutions, flows of foreign direct investment, international terrorism, civil wars, and international conflict, we often uncritically adopt established theoretical frameworks and research designs. The natural assumption is that well-known and widely cited studies, once ingrained within the tradition of the discipline, should not be challenged or refuted. However, do such noted research areas reflect scientific truth? Choi looks closely at ten widely cited empirical studies that represent well-known research programs in international relations. His discussions address such statistical and theoretical issues as endogeneity bias, model specification error, fixed effects, theoretical predictability, outliers, normality of regression residuals, and choice of estimation techniques. In addition, scientific progress made by remarkable discoveries usually results from finding a new way of thinking about long-held scientific truths, therefore Choi also demonstrates how one may search for novel ideas at minimal cost by developing new research designs with original data. Here is a valuable resource for students, scholars, and policy makers who want to quickly grasp the evolutionary pattern of scientific research on democracy, foreign investment, terrorism, and conflict; build their research designs and choose appropriate statistical techniques; and identify their own agendas for the production of cutting-edge research.
The COVID-19 crisis has had a tremendous economic impact for all countries. Yet, assessing the full impact of the crisis has been frequently hampered by the delayed publication of official GDP statistics in several emerging market and developing economies. This paper outlines a machine-learning framework that helps track economic activity in real time for these economies. As illustrative examples, the framework is applied to selected sub-Saharan African economies. The framework is able to provide timely information on economic activity more swiftly than official statistics.
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