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Abstract: This paper provides an exhaustive analysis of the key factors that led to the rising global energy demand, based on an OECD sample and a non-OECD sample over the period 1980-2009. In addition to income and price elasticities tranditionally examined, this research takes into account the effects of structural change, demographic change and technological change and temperature change on energy demand. Using newly developed panel data techniques allowing for spatial error dependence and spatial lag dependence, this research provides evidence for the existence of spatial lag dependence, a positive but declining income elasticity, a negative price elasticity, and the significant effects of industry/service value added, urbanization and technological innovations on energy demand. The research has important implications for public policies to induce energy savings, develop service sector and promote energy-efficient technologies towards a sustainable future.
Keywords: Energy Demand; Structural Change; Demographic Change; Technological Change; Cross Section Dependence; Spatial Dependence
JEL Classification: Q43; Q56; C33
Abstract: This paper examines the effects of output volatility on global sustainability in a dynamic panel data model allowing for error cross section dependence. It finds that output volatility impedes the process of sustainable development. It further suggests that output volatility exerts a significant effect on natural resources depletion, a key element of sustainability measure, via a financial development channel with respect to liquidity liability ratio. It also shows that lower income countries, lower energy intensity countries and lower trade share countries are in general more vulnerable to macroeconomic volatility or shocks. The findings highlight the interaction between global financial markets and the wider economy as a key factor influencing the sustainable development path, and have significant implications for the conduct of macroeconomic and environmental policies in an integrated global green economy.
Keywords: Output Volatility; Global Sustainability; Genuine Savings; Depletion of Natural Resources; Cross Section Dependence
JEL Classification: E32; O11; O16
Abstract: The Clean Development Mechanism (CDM) of Kyoto Protocol, designed for the industrialised countries to earn emission credits by investing in greenhouse gas (GHG) emission reduction projects in developing countries, shall contribute to emission reductions and sustainable development in the host countries. However, whether the CDM is achieving its dual goals has been questionable. This research empirically investigates the long-run impacts of CDM projects on CO₂ emission reductions for 80 eligible CDM host countries over 1993-2009. By allowing for considerable heterogeneity across countries, this research provides evidence in support of a decline in CO₂ emissions associated with CDM projects. It serves to encourage developing countries to effectively develop CDM projects towards low carbon development.
Keywords: Clean Development Mechanism; CO2 Emissions; Heterogeneous Dynamic Panels; Developing Countries
JEL Classification: O19; Q54; Q56
Abstract: The reduction of carbon dioxide emissions is a pressing challenge for China. China’s local energy-related emission patterns are important for setting effective greenhouse-gas abatement policies.....
Abstract: This book studies the determinants of the development of financial markets and carbon markets. It is essential reading for all interested in economic and financial development, climate change, environmental economics, and applied econometrics.
Abstract: Several recent papers have argued that trade and financial development may be linked, either for political economy reasons, or because foreign competition and exposure to shocks lead to changes in the demand for external finance. In this paper we use the cross-country and time-series variation in openness to study the relationship between trade and finance in more detail. Our results suggest that increases in goods market openness are typically followed by sustained increases in financial depth.
Keywords: Financial Dvelopment; Openness and Trade
JEL Classification: F13; O16
Abstract: Using recently developed panel data techniques on data for 43 developing countries over the period 1970-98, this paper provides an exhaustive analysis of casuality between aggregate private investment and financial development. A common factor approach on annual data, allowing for cross country error dependence and heterogeneity across countries, suggests positive causal effects going in both directions. The findings have rich implications for the development of financial markets and the conduct of macroeconomic policies in developing countries in an integrated global economy.
Keywords : Financial Development; Private Investment; Global interdependence; Common Factor Analysis; Panel Unit Root Test; Panel Cointegration Test.
JEL Classification: F36; F41; E22; E44
Abstract: This paper examines whether political institutional improvement promotes financial development, using a panel dataset of 90 developed and developing countries over 1960-99. The empirical evidence reveals a positive effect of institutional improvement on financial development at least in the short-run, particularly for lower-income countries. The preliminary evidence by a before-after event study indicates that a democratic transformation is typically followed by an increase in financial development.
Keywords: Political Institutions; Financial Development; Globalisation
JEL Classification:G20; O16; O17
Abstract: This paper studies what induces governments to undertake reforms aimed at financial development. Its starting point is Abiad and Mody (AER 95(1), 2005). Rather than their ordered logit technique, it uses a within groups approach allowing for error dependence across countries and over time. This paper finds that policy change in a country is negatively rather positively associated with its liberalization level, while the regional liberalization gap does not appear relevant. On the effects of shocks and crises, it argues that some of the Abiad and Mody (2005) findings are robust, but others are fragile. Furthermore, it claims that the extent of democracy is important for this analysis, and identifies a negative effect of the extent of democracy on policy reform.
Keywords: Financial Liberalization; Financial Reform; Political Economy; Cross Country Dependence
JEL Classification: D72; F36; G18
Abstract: This paper investigates the causality between aggregate private investment and financial development for 43 developing countries. GMM estimation on averaged data suggests the positive causal effects going in both directions, controlling for the possibility of endogeneity bias and omitted variable bias. The findings have rich implications for the conduct of macroeconomic policies in developing countries.
Keywords: Private Investment; Financial Development; Dynamic Panel Data Model
JEL Classification:O16; E22
Last updated by Yongfu Huang: October 2011
