Amin Karimu

Convergence in Carbon Dioxide Emissions and the Role of Growth and Institutions - A Parametric and Nonparametric Analysis

This paper examines convergence of per capita carbon dioxide (CO2) emission for a panel of 124 countries taking into account the impact of economic growth and the quality of government institutions. The analysis builds on both parametric and non-parametric panel data techniques, and we examine the β-convergence hypothesis in a neoclassical growth model setting with institutional quality as one of the independent variables influencing both emissions and output growth. The results reveal evidence in support of β-convergence of per capita CO2 emissions for the global sample, and for the sub-samples comprising OECD versus non-OECD countries and high- versus low-income countries, respectively. There is, however, heterogeneity in β-convergence and it tends to vary with the level of the initial per capita CO2 emissions. We also report evidence of a negative direct effect of institutional quality on growth in per capita CO2 emissions, especially for the global and high-income samples. However, institutional quality also promotes economic growth, thus generating a positive indirect effect on emissions growth. Overall the empirical results suggest a positive net effect of institutional quality on growth in per capita CO2 emissions in the global sample. Finally, the non-parametric approach reveals some evidence of bias in the parametric approach, in particular in the case of the estimates for the convergence parameter at either end of the distribution.

Impact of economic and non‐economic factors on gasoline demand: a varying parameter model for Sweden and the UK

This paper investigated the impact of price, income and non-economic factors on gasoline demand using a structural time series model. The results indicated that non-economic factors did have an impact on gasoline demand and also one of the largest contributors to changes in gasoline demand in both countries, especially after the 1990s. The results from the time-varying parameter model indicated that both price and income elasticities were varying over time, but the variations were insignificant for both Sweden and the UK. The estimated gasoline trend also showed a similar pattern for the two countries, increasing continuously up to 1990 and taking a downturn thereafter.

Climate Change and Electricity Consumption in Sub‐Saharan Africa: Assessing the Dynamic Responses to Climate Variability

Electricity consumption in Sub-Saharan Africa has surged over the past two decades, whereas economic fundamentals like growth in gross domestic product (GDP) might have contributed to this trend, the impact of changing climatic conditions cannot be underestimated. This study therefore investigates the dynamics among electricity consumption, temperature variability (a proxy for climate change) and economic growth, while controlling for urbanization within a structural vector error correction model for 11 countries in Sub-Saharan Africa. Findings from the study indicate that a positive shock in temperature variability has a positive permanent effect on electricity consumption for all the countries except Togo, South Africa and Zimbabwe. In the case of Togo we find only transitory effects of positive shocks in temperature variability on electricity consumption. However, these effects are minimal, given the low penetration rate for air conditioners and heating devices in these countries. Moreover the findings further indicate that the effects of a positive shock in temperature variability on real GDP is consistent in terms of the direction of the effects, which is negative, but only vary across the sampled countries in relation to the period(s) the effects of the shocks completely diminished.

Renewable Energy Policy, Economic Growth and Employment in EU Countries: Gain Without Pain?

Given the intensifying debates whether governments should use industrial policies to promote particular renewable energy technologies, the main objective of this study is to investigate the long-run effects of renewable energy support policies on economic growth and employment in 15 European Union (EU) member states for the 1990-2012 time period by using panel-data time-series econometric techniques. The first hypothesis is that the EU’s renewable energy support policies lead to technological advancement, followed by economy growth, in the long-run. The second hypothesis states that these policies at least generate an increase in output and employment in the short-run. In summary, our results provide some evidence in support of the second hypothesis, but, in contrary to the similar studies, our findings do not support the first hypothesis that these policies promote growth in the long-run.

Natural resource revenues and public investment in resource-rich economies in sub-Saharan Africa

The general policy prescription for resource-rich countries is that, for sustainable consumption, a greater percentage of the windfall from resource rents should be channelled into accumulating for ...

Re-examining the financial development-openness nexus: nonparametric evidence for developing countries

This paper re-examines the nexus between financial development and openness in developing countries. Specifically, we test whether both financial and trade openness explain financial development and its variations across 44 developing economies. Questioning the functional specifications in previous studies, we propose a fully nonparametric modelling approach to validate the simultaneous openness hypothesis. Our findings from the parametric approach suggest that both openness dimensions positively impact financial development, providing a loose support for the simultaneous openness hypothesis. The results based on the nonparametric approach suggest a negative effect of closed economies (economies with relatively closed trade and capital accounts) on financial development, supporting the strong version of the simultaneous openness hypothesis. Correct model specification test results support the nonparametric model relative to the parametric model as appropriate for the sampled data. Our conclusion is therefore based on the nonparametric finding, which supports the simultaneous openness hypothesis for the selected developing countries.

Convergence in global environmental performance Assessing country heterogeneity

A large body of literature explores convergence in environmental performance (EP) using a simple measure of the percentage change of per capita CO2 as dependent variable and the level of per capita CO2 and GDP as explanatory variables. As such it conforms to the standard convergence literature in the economic growth literature. This study differs from these studies by constructing a measure based on production theory, where production processes explicitly results in the production of two outputs; a good output (GDP) and a bad output (CO2). Based on this we derive an EP index that can be expressed as the ratio of the inverse of the change of the emission intensity. We use the derived EP index to test the beta-convergence hypothesis for a panel of 94 countries. The results reveal strong evidence in support of beta-convergence in environmental, or carbon, performance. Moreover we find evidence of heterogeneity between groups of countries in line with the concept of “club” convergence and also heterogeneity between countries within country groups, especially for the high-income group. Additionally, we find evidence of a negative relation between environmental performance and fossil fuel share both at the global level as well as within sub-samples, which tend to vary with capital intensity. As such the results conform to the results from studies of the dynamics of per capita emissions. These results are therefore very informative and can help in both regional and international negotiations regarding burden sharing of global CO2 emissions. The results also suggest a balanced policy mix between efficiency and conservation policies in order to promote good environmental performance.