When does economic development promote mitigation and why?

Is economic development compatible with mitigation? On the one hand, development should promote effective climate policy by enhancing states’ capacities for mitigation. On the other hand, economic growth creates more demand for production, thereby inhibiting emissions reduction. These arguments are often reconciled in the environmental Kuznets curve (EKC) thesis. According to this approach, development initially increases emissions in poor economies, but begins to lower emissions after a country has attained a certain level of development. The aim of this article is to determine empirically whether the EKC hypothesis seems plausible in light of emissions trends over the birth and implementation of the Kyoto Protocol. Drawing on data from the World Bank World Development Indicators and World Resources Institute Climate Data Explorer, it conducts a large-N investigation of the emissions behaviour of 120 countries from 1990 to 2012. While several quantitative studies have found that economic factors influence emissions activity, this article goes beyond existing research by employing a more sophisticated – multilevel – research design to determine whether economic development: (a) continues to be a significant driver once country-level clustering is accounted for and (b) has different effects on different countries. The results of this article indicate that, even after we account for country-level clustering and hold constant the other main putative drivers of emissions activity, economic development tends to inhibit emissions reduction. They also provide strong evidence that emissions trends resemble the EKC, with development significantly constraining emissions reduction in the South and promoting it in the North

The resource curse – What have we learned from two decades of intensive research:Introduction to the Special Issue

There has been increasing interest in the so-called ‘resource curse’, i.e. the tendency of resource-rich countries to underperform in several development outcomes. This has generated a mountain of (often contradictory) evidence leaving many floundering in the flood of information. The special issue compiles eight papers from some of the most prominent contributors to this literature, combining original research with critical reflection on the current stock of knowledge. The studies collectively emphasize the complexities and conditionalities of the ‘curse’ – its presence/intensity is largely context-specific, depending on the type of resources, socio-political institutions and linkages with the rest of the economy

Falling behind and catching up : India’s transition from a colonial economy

India fell behind during colonial rule. The absolute and relative decline of Indian GDP per capita with respect to Britain began before colonization and coincided with the rising textile trade with Europe in the 18th century. The decline of traditional industries was not the main driver Indian decline and stagnation. Inadequate investment in agriculture and consequent decline in yield per acre stalled economic growth. Modern industries emerged and grew relatively fast. The falling behind was reversed after independence. Policies of industrialization and a green revolution in agriculture increased productivity growth in agriculture and industry, but Indian growth has been led by services. A strong focus on higher education under colonial policy had created an advantage for the service sector, which today has a high concentration of human capital. However, the slow expansion in primary education was a disadvantage in comparison with the high growth East Asian economies

Trade openness, income levels, and economic growth: the case of developing countries, 1970–2009.

This paper attempts to investigate the extent to which trade openness has had an impact on the levels of income and rates of growth in a sample of 115 developing countries for the period 1970–2009. Additionally, to assess whether there is an income level threshold for a country to benefit from international trade, the sample is broken down into three mutually exclusive groups of countries: low-income, lower middle-income, and upper middleincome countries. The main novelty of the paper lies on the use, on the one hand, of a new and better trade openness measure and, on the other hand, of non-stationary heterogeneous panel cointegration techniques to cope with the problem of cross-sectional dependence. The results show a positive bidirectional relationship between trade openness and income level in the long run, thus suggesting that trade openness is both a cause and a consequence of the level of income. The results for the short run, that is, the link between openness growth and economic growth, go in the same direction

Characterizing Monetary and Fiscal Policy Rules and Interactions when Commodity Prices Matter.

We examine the extent to which commodity price fluctuations matter for monetary and fiscal policy formulation in high primary commodity export economies. Markov mixture specifications of monetary and fiscal policy rules, stylized to account for commodity price slacks are estimated using specifically designed Bayesian techniques. We find that policymakers do indeed respond to commodity price slacks, and with varying degrees, depending on the policy regime in place and the country under investigation. Policy is characterized by distinctive episodes of active and passive policy regimes, driven by the response of monetary policy to inflation and the response of fiscal policy to past government debt. Moreover, monetary authorities fail to act aggressively enough to achieve announced inflation targets or to synchronize with fiscal authorities. The results hold implications for the correct specification of policy rules and interactions in DSGE models for these economies

The measurement of social stratification : comparative perspectives between Europe and Latin America

Production of INCASI Project H2020-MSCA-RISE-2015 GA 691004This chapter analyses compared social stratification in three Latin American countries (Argentina, Chile and Uruguay) and four European countries (Finland, France, Spain, Great Britain). We focus on both external and internal borders of social classes, as well as on the challenges posed by their analysis for sociology. We compare social classes using EGP6 in relation to a variety of social indicators, to examine how social classes vary among countries. We include debates on production models and welfare state policies to understand the specific configurations and compare the conditions of some of the INCASI countries regarding social stratification. Lastly, we apply a latent class analysis to validate the number of social classes and to recognise class boundaries

The La Marca model revisited: Structuralist goodwin cycles with evolutionary supply side and balance of payments constraints

This research is aimed at investigating the causes of volatility that affect middle‐income countries by studying the La Marca model. Drawing from the open‐economy Goodwin tradition, this model demonstrates that economic activity, income distribution and accumulation of foreign assets dynamically interact, resulting in a pattern of dampened cycles. The study consists in analyzing the characteristics of the model by initially imposing: (I) a constant real exchange rate; (II) a constant net external asset to capital ratio, which is in line with the balance of payments dominance theory and (III) a fixed income distribution. We then (IV) expand the original model by adding an evolutionary supply‐side in which productivity is at the center of the economic dynamic through international technology transfer and the Kaldor‐Verdoorn effect. The results show that (1) the model always converges. (2) The restrictions (I) and (II) remove the cyclical component of the model, which highlights a central difference between La Marca and the original Goodwin model. (3) Fixed income distribution leads to a monotonic trajectory that reduces oscillations. (4) The inclusion of productivity dynamics generates new sources of volatility in the relationship between productivity, capacity utilization and net external assets and is in line with the structuralist argument of structural fragility

On Foreign Participation and Hiring Patterns after Privatization

Critics of globalization claim that foreign ownership of privatized firms is linked to negative post-privatization labor outcomes, such as more firing and less hiring. This paper uses new firm-level data for a cross section of countries to test this idea and provides evidence that foreign purchasers of state-owned enterprises tend to acquire firms that were already better restructured before privatization. Additionally, this paper does not find evidence that foreign participation in privatized firms is linked to negative labor outcomes