Saleheen Khan

The Asian crisis: an economic analysis of the causes

Prevailing views suggest that short-term, unhedged foreign borrowing and crony capitalism, in combination with a weak financial system and lack of transparency may lie at the heart of the Asian financial crisis of 1997. Although the crisis first began in Thailand, it quickly spread to the rest of the region. While it is important to know the causes of the crisis, perhaps it is no less important to understand the process by which it spreads to other countries. From theoretical considerations trade links should be seen as a relevant and important channel in explaining the propagation of the Asian crisis. This paper empirically examines and analyzes the historical trade pattern among the seven South and East Asian countries to demonstrate how intraregional trade evolved over time. In addition it also provides a formal test of contagion through co-movement in real exchange rates during the pre-crisis and crisis period.

THE IMPACT OF GLOBALIZATION ON CO2 EMISSIONS IN CHINA

This paper examines the Environmental Kuznets Curve (EKC) hypothesis for China in the presence of globalization. We have applied Bayer and Hanck combined cointegration test as well as the ARDL bounds testing approach to cointegration by accommodating structural breaks in the series. The causal relationship among the variables is investigated by applying the VECM causality framework. The study covers the period of 1970-2012. The results confirm the presence of cointegration among the variables. Furthermore, the EKC hypothesis is valid in China both in short-and-long runs. Coal consumption increases CO2 emissions significantly. The overall index and sub-indices of globalization indicate that globalization in China is decreasing CO2 emissions. The causality results reveal that economic growth causes CO2 emissions confirming the existence of the EKC hypothesis. The feedback effect exists between coal consumption and CO2 emissions. CO2 emissions Granger causes globalization (social, economic and political).

Electricity consumption, economic growth and trade openness in Kazakhstan: evidence from cointegration and causality

We investigate the relation between electricity consumption and economic growth by incorporating trade openness, capital, and labor in production function of Kazakhstan using annual data for 1991-2014. We apply the ARDL bounds testing and the VECM Granger causality approach to examine long run and causality relation between the variables. Our results confirm the existence of long run relation among the series. The empirical evidence reveals that electricity consumption adds in economic growth. Trade openness stimulates economic growth, and capital and labor promote economic growth, as well. The causality analysis shows that electricity consumption Granger causes economic growth and trade openness. We also document feedback effect between trade openness and economic growth. Our study provides new insights for policy makers to articulate a comprehensive economic, trade and energy policy to sustain long run economic growth in Kazakhstan.

The long run impact of immigration on labor market in an advanced economy: Evidence from US data

Purpose - – The purpose of this paper is to examine the dynamic relationship among immigration rate, GDP per capita, and and real wage rates in the USA. Design/methodology/approach - – The paper implements the Johansen-Juselius (1990, 1992) cointegration technique to test for a long-run relationship; and for short-run dynamics the authors apply Granger causality tests under the vector error-correction model. Findings - – The results show that the long-run causality runs from GDP per capita to immigration, not vice versa. Growing economy attracts immigrants. The authors also find that immigration flow depresses average weekly earnings of the natives in the long-run. Originality/value - – The authors are not aware of any study on the USA addressing the impact of immigrants on labor market using a tripartite approach by explicitly incorporating economic growth. It is therefore important to pursue a theoretically justified empirical model in search of a relation to resolve on apparent immigration debate.

Persistence of Shock in a Time Series

Services provided by Bangladesh Railway (BR), a popular mode of transportation, have been vital to the growth and development of the economy since their inception. However, the declining share of its revenue to the gross domestic product (GDP) remains a major policy concern which needs to be addressed. Public policy, particularly short-term stabilization policy, aimed at dealing with this concern would be effective if the series (share of revenue to GDP) is trend stationary. However, if the series is found to be stochastically non-stationary, such stabilization policy would be ineffective and would signal the need for long-term restructuring and reforms. Given this perspective, the article examines if the relevant time series (in this case, railway revenue as per cent of GDP) contains a deterministic or stochastic trend to assess whether short-term public stabilization policy would be effective or long-term structural adjustments and reforms would be necessary. In addition, the article also provides a measure of persistence in the above mentioned time series following Cochrane (1988). Loss of railway’s share appears to be due to long-term shifts in demand due to inter-modal competition as well as supply and capacity constraints.