Conference Abstracts

Data Providers

IMF Data Developments: New Concepts, New Tools
Gareth McGuinness, IMF Statistics Department

The world faces numerous data challenges – we have ever increasing amounts of data, but not necessarily the right data. IMF developments aim to expand the coverage of important economic concepts not widely available, while providing a toolset that allows users to quickly uncover data of interest. Significant progress has been made on new measures of international direct and portfolio investment, while the compilation of Financial Soundness Indicators picks up speed. The IMF’s forthcoming eLibrary, in combination with the IMF-hosted Principal Global Indicators website, will make finding these and other data significantly faster and easier for researchers, opinion-leaders and decision-makers.

The Global Project: Measuring the Progress of Societies
Angela Costrini Hariche, Project Manager, OECD Development Centre and Statistics Directorate

There is an increasing gap between what official statistics say about economic performance and how people perceive their own living conditions. There is a real risk that people lose faith in governments’ ability to address “what matters for them” which has implications for the very functioning of democracy. GDP is a measure from an economic point of view but needs to be complimented as it is not a good measure of well-being.

The OECD started to address these concerns over 7 years ago and this led to the launch of the Global Project on Measuring the Progress of Societies in 2007 in partnership with other international organisations. We will explore how the Global Project is contributing to the measuring progress agenda, what the OECD is doing to contribute to this important initiative and finally, what innovative tools are being developed to promote this endeavour.

Thinking Conceptually, Analysing Empirically: the New Europe Barometer
Professor Richard Rose, Centre for the Study of Public Policy, University of Aberdeen

The fall of the Berlin Wall was followed by the treble transformation of the polity, economy and society of Communist systems, and often by changes in state boundaries. The choice was to ask standard questions in Western settings or, in a radically different setting, to think conceptually in order to turn anecdotes into data. The point is illustrated with examples of questions and answers with fresh economic, political and social capital measures and analyses treating time as a variable. Suggestions are made about how to make best use of a data base containing more than 100 surveys in 17 countries.

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Meet the Researchers

World Electricity Cooperation
Kwanruetai Boonyasana, University of Leicester.

Currently, there is a serious problem of the high price of electricity around the world. There is also the issue of electricity shortage in some countries coexisting with surplus in others. “The Absolute Advantage” of Adam Smith (1776), “The Comparative Advantage” of David Ricardo (1817) and “Pareto Principle” of Vilfredo Pareto (1906) all suggest mutual advantages that can arise from efficient import and export. This study examines whether electricity co-operation (import and export) between countries can help redress the problem of high electricity prices. The analytical work is based on two steps. Firstly, “The Model Representation of Electricity Market” defines what factors affect electricity price in order to obtain the price function. Secondly, “Panel Data Analysis, Ordinary Least Square (OLS)” demonstrates coefficients of electricity price using 29 Organization for Economic Co-operation and Development (OECD) countries’ yearly data from 1980-2008 . The result shows that the real prices for generation, when government subsidies are taken into account, are higher than for electricity co-operation (import and export). From this study, we can see that both import and export countries will gain a benefit from electricity co-operation. Export countries will gain more income and the prices in excess demand countries will decrease. When the world prices of electricity decrease, it will help people to have a higher standard of living and also reduce the cost of industry and business.

Well-being for believers? Contextualising the effects of religiosity on life-satisfaction.
Jan Eichhorn, University of Edinburgh.

A number of studies have illustrated that people with stronger believes in God tend to show higher levels of subjective well-being (or life-satisfaction). While many studies focused on a particular country only, some comparative approaches suggest that differences across countries exist. This analysis investigates systematically how variation in contextualising factors, in particular the level of religiosity and the level of institutionalised religious practice, affect the relationship found at the individual level.

Using data from the World Values Survey for a sample of European (West- and East) and Anglo-Saxon countries, and applying a hierarchical linear model, the individual level positive effects of religiosity on life-satisfaction render insignificant once average country levels are considered. Considering interaction effects, higher levels of individual religiosity only prove to be conducive to well-being if they are placed in countries with high average levels. While higher average levels of institutionalised practice also enhance the effect of individual believes, average levels of religiosity do not significantly affect the effect of actual individual practice. The findings suggest that positive individual-level effects are not based on intrinsic features, but reflect norm conformity processes – analogous to other happiness-orientation domains investigated in cross-cultural well-being research.

A test of Okuns law for 10 Eastern European Countries
Tom Boulton, London Metropolitan University.

Okun’s Law is one of those rare things in economics, describing an enduring relationship between two of macroeconomics’ most important variables. This study aimed to investigated this relationship and examine the significance of other variables that influence the Unemployment/real GDP relationship, and achieved this objective with some success. The nature of the countries that were under examination in this study also provides us with some extra insight into the relationship between these two principal economic variables by showing that the original estimate of Okun’s law that states three points of real GDP for each 1 percent reduction in the unemployment rate can be revised up to four points for those countries experiencing rapid economic development. This study also examines the significance of pooled estimates in order to see the significance of co-integration and discovers random effect show less significant results than fixed effects when pooled data is analysed.

Inequality, Poverty and Globalisation in OIC Countries: A Dynamic Comparative Analysis
Muhammad Tariq Majeed, University of Glasgow.

It is generally considered among the economists and policy makers that over a long period open economies generate more gains as compare to closed ones, and that relatively open policies contribute significantly to economic growth, employment enhancement and poverty eradication. In the short run, however, one of the steps towards openness-trade liberalization hurts poorer actors in the economy. It is quite possible that successful open regimes, even in the long run, may leave a number of people behind in poverty. Trade liberalization by its nature implies adjustment and so is likely to have distributional impacts that normally harm poorer actors in the economy.

Trade liberalization, or openness in trade, is now generally considered as economically beneficial because it increases the size of the pie. However, the recent anti-globalization critics have suggested that it is socially harmful on several dimensions, among them the issues of poverty, income inequality and unemployment drawing significant attention of development practitioners and policy makers. The argument is that free trade accentuates, not ameliorates, and that it intensifies, not diminishes, poverty and income inequality in poor countries.

According to the well-known Kuznets (1955) inverted-U hypothesis, income inequality increases during the early stages of economic development and after reaching a turning point declines. Although, Kuznets curve exhibits negative relationship between economic growth and inequality in long run but poverty is a still long standing problem in the world despite many growth episodes. Whether growth is good or bad for poor? Does Kuznets curve hold? Literature is not conclusive in establishing the relationship between economic growth and income inequality. For this reason, relationship between economic growth and income inequality is a key concern in discussions of development policy.

This study examines the impact of globalization on cross-country inequality and poverty using a panel data set from OIC counties over a long period 1965-2008. With separate modelling for poverty and inequality, explicit control for financial intermediation, and incorporation of nonlinearity, the paper attempts to provide the deeper understanding of cross country variation in income inequality and poverty. In order to address the potential problem of endogeneity instrumental approach would be used along with Difference GMM and System GMM econometric techniques.

Furthermore this study use relatively more comparable statistics on inequality and poverty and adds to this emerging literature by addressing to the following questions for OIC countries: (1) does economic growth benefit different economic actors equally or it comes at the cost of increased inequality leaving poor actors behind? (2) Is the effect perhaps different over the path of development in the long run? (3) Does high financial intermediation reduce poverty and inequality? (4) What is the role of human capital in explaining cross country variation in income distribution and poverty? (5) Does openness spill over benefits equally? (6) What is the role of government in all this; does government spending reduce potentially existing inequalities and poverty?

Policy Stability and Macroeconomic Policies
Nicole Baerg, Emory University, Atlanta.

Scholars often use policy stability as a measure of policy credibility. Domestic political institutions, such as central banks, impact a country's ability to change policies; if domestic institutions impede policy change, policy is deemed credible. The current wisdom is that stable prices result from credible policies. But there is a puzzle. Empirically, researchers find that while independent central banks act as an important inflation fighter in developed countries, in developing countries the statistical association between independent central banks and low inflation is weak. 

In order to explain this puzzle, research Keefer and Stasavage (2003) argue that for developing countries, central bank independence only works when there are additional political checks and balances which keep the central bank independent. Unfortunately, however, the statistical sample these researchers use to test their argument contains a lot of missing data. Using various kinds of imputation techniques, I find that upon correcting for missing data,  central bank independence matters for both developing countries and developed countries, and even for those countries that do not have the necessary political checks and balances. 

Second, using data from the IMF on Latin America in the Americas, I examine whether policy stability is associated with policy credibility. I collect data counting the number of policy changes made to a country`s trade and/or monetary regime. I then examine whether a country's inflation rate is a good predictor of change. My findings suggests some caution in using the terms policy stability and policy credibility interchangeably. Countries experiencing high and or hyperinflation conditions may in fact have policy stability without policy credibility.

The Dynamic of Institutions and Economic Growth: The Asian Experience
Mahyudin Ahmad, University of Leicester.

In this paper we investigate the Asian growth experience in the past three decades from institutional perspective and offer additional evidence that institutions is central in explaining economic performance. The Asian region has seen a dramatic economic growth since early 1990s and the feat was dubbed “the Asian Miracle” by the World Bank. Unique institutional settings in the Asian region such as a strong authoritarian government implementing interventionist policies is believed to have somehow contributed to spur economic growth in the region. However, an unprecedented financial crisis in 1997/98 has brought an abrupt end to the dream growths, and has resulted in severe recessions for some of the previously high-performing countries in the region. Though it was not the main reason causing the financial crisis, institutional weakness could somehow be attributed to have exacerbated the impacts of the crisis. These episodes of high growth and financial crisis undoubtedly offer an interesting case study from the institutional perspective. By employing dynamic panel system GMM analysis and utilizing the latest institutional data, we extend the existing evidence on the importance of institutional quality on economic growth in developing countries particularly the East Asian region. On overall, we find evidence that Investment Profile, Government Stability and Law and Order matters significantly for growth in developing countries, and the former two qualities show significant growth effects in the East Asian region. During the period of high growth in the region throughout year 1984-1996, Investment Profile emerges the significant growth determinant while Government Stability shows some influence to growth for period post-Asian Financial crisis 1997/98.

Oil Prices, Exchange rate volatility and US Dollar-Pegged Currencies
Giorgio Castagneto-Gissey, Warwick University.

This dissertation examines whether changes in oil prices affect differently the volatility of nominal spot exchange rate (NSER) (against the US dollar, USD) with currencies pegged to the USD compared to currencies not pegged to the USD, given the fact and possible explanation in that oil products are actually traded in USD currency. To this extent, I study the daily NSERs, between 2000-2010, of two currencies pegged to the USD (the Singapore and Hong Kong dollars), two pegged to the euro (the Danish and Swedish Krones) and, in addition, two currencies under a free floating regime (the Mexican Peso and South African Rand),

The study makes use of a Generalised Autoregressive Conditional Heteroscedastic (GARCH) approach, concluding that the change in volatility, of NSERs pegged to the USD is much lower than in the remaining two categorised classes of NSERs, thus finding a possibly stabilising effect of oil prices in the case of regimes with a dollar peg.
I also present a Vector Autoregressive (VAR) model, in good agreement with the GARCH model. VAR results suggest that changes in oil prices do not significantly affect NSERs relative to currencies pegged to the USD. In contrast, NSERs decrease by about 2.2% and 3.5% with free-floating and euro-pegged currencies, respectively.

Building indicators from statistics tables of unknown structure
Pavel Kudinov, Dorodnicyn Computing Center of RAS, Moscow.

At present although there are many authoritative and open sources of statistical data on the web, there is no trusted search engine capable of searching across these sources designed specifically for statistical data.  Therefore there is an urgent problem of creating a system for gathering, storing and analyzing statistics from different sources. One of the core features for such system must be outputting a relevant set of indicators by users' queries with links to sources.

Unlike traditional search engines, arrangement of search results among tables needs nontrivial preprocessing. As a result of this preprocessing there is a list of tuples for each number in a table. Each tuple consists of corresponding value and a list of attributes of different types like unit of measure, time range, territory, sector of economy, type of economic activity, etc. Since tables are very heterogeneous and it is very hard to formalize such preprocessing,  we propose applying machine learning approach. Experts in statistics will be responsible for teaching this system. They will have ability to correct mistakes, fill up dictionaries of synonyms, so correctness of processing of similar tables would be ensured.

After a set of tuples from tables were received, it is transformed into a set of indicators of universal format which guarantees consistency of attribute types, ability to aggregate data and building series of indicators from different tables.

Job insecurity and the local economic climate across Europe
Ewan Carr, University of Manchester.

Are individuals more strongly affected by anticipated job loss when local economic conditions are worse? This paper describes an analysis in which data from the European Social Survey (2006), Eurostat REGIO and the OECD were combined to consider how local economic conditions affect the association between job insecurity and subjective well-being in Europe. The negative association between the fear of job loss and reported well-being is well established in the literature (see Hartley, 1991; Burchell, 1994; De Witte, 1999). There is also evidence to suggest that local levels of unemployment can have a direct negative effect on individual well-being (Clark et al., 2010). Much less is known about the extent to which the consequences of job insecurity are moderated by local economic conditions. Job insecurity may be associated with depression (Hartley, 1991; Peterson et al., 1993; Ferrie et al., 2002) and problems sleeping (Mattiasson et al., 1990; Fischer et al., 2005; Burchell, 2009), but how does the strength of these associations vary in the face of contrasting local conditions? Multilevel structural equation modelling (SEM) is used to test a single hypothesis: that the negative effect of job insecurity on subjective well-being is amplified when local economic conditions are worse. Contextual effects include levels and trends of unemployment and GDP, at the regional and national level. Some initial findings will be presented.

The Finance Growth Nexus in Transition Economies
Khurshid Djalilov, King's College London.

Central Asian countries are on a difficult path of transition from a planned to a market economy.  Although the reforms in the region began much later than those of Central and Eastern Europe, the Central Asian countries are making significant changes to transform monetary and fiscal policies and the structure of their institutions and systems.  While the major objective is sustained economic growth, developing a strong financial system is essential to these economies.  Thus, it is important to examine the development of these national financial systems and determine optimal programmes and policies that will achieve this goal.  Research to investigate the relationship between financial system development and economic growth specific to Central Asia improves our understanding of the role of the financial system in promoting growth and recovery in these economies.  Particularly important are the problems of the existing highly underdeveloped banking systems and financial markets.

The Central Asia region includes five former Soviet republics –Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan and the collapse of the Soviet Union severely affected the economy of these countries.  Their economic base had been part of the industrial complex of the USSR, and despite their large agricultural sectors, the Central Asian countries depended on food imports.  Currently, the principal sectors in these countries are agriculture and mining and the region generally has substantial reserves of mineral resources.

Over the last two decades, there has been a great deal of research on the transition economies of Central and Eastern Europe.  However, the Central Asian countries have been largely ignored due to the lack of consistent and accurate data.  Therefore, analysing financial sector development and economic growth and performance is very valuable because these countries have specific features that are not observable in other transition economies of Central and Eastern Europe and the other former USSR republics.

To investigate the finance-growth link in these countries, we used the data for the period 1992-2008. The results showed that the financial sector indicators of EBRD as well as the difference between lending and borrowing rates have negative growth impact. Some countries still have very low scores on the progress of the transition indicators. Perhaps, the financial institutions are still unable to fully respond to the additional money demand caused by growth, which may be harming growth at this current stage of development.  Additionally, credit to private sector appeared to be statistically insignificant due to still existing soft budget constraints. 

Myopic voter behaviour and limitations for development public policy
Erica Barbosa , London School of Economics.

The notion of myopic voter was mostly expanded in the realm of research dedicated to electoral cycles, and how governments manipulate their activities in order to guarantee re-election.  The concept refers to either the inability of voters to appreciate long-term consequences of short-term government activities, or to having a high discounted appraisal of future consequences (Mueller, 2007). Some have looked at voter myopia in the context of political business cycles, in which governing parties manipulate macroeconomic outcomes throughout election cycles (Alesina & Roubini, 1992; Alesina, Roubini & Cohen, 1997). Others have looked at the manipulation of public expenditure right before elections (Blais and Nadau, 1992). In both cases, governments are thought of as “taking advantage” of this phenomenon to satisfy their election objectives.  Yet, an alternative view – which I explore in my research  - is that governments do not necessarily “take advantage” of voters’ myopia, but rather that they are bound by it and, therefore, limited in their capacity to execute policies for long-term development; especially in developing countries. In this context, increasing popular participation in the policy-making process may actually hinder development if not accompanied by complementary strategies. I focus my work on Latin American countries, where this seems to be a recurrent phenomenon due – partly – to demographics and the socio-economic block that represents the strongest electoral base; and I present Bolivia as a case-study. Through the analysis of government executed budgets, campaign strategies, recent reforms, current laws and interviews with government authorities, I argue that present policies that increase citizen participation in policy decision making – in an attempt to increase attention to social demands and better address them – may be counter-productive for broader development goals. Subsequently, I sustain that these social demands stem in great part from a myopic view of the impact of government policies, as well as a lack of appropriate individual and social incentives. Finally, I present some suggestions in terms of complimentary strategies that could accompany recent reforms of social inclusion and citizen participation to attain more fruitful development interventions.

Being Agnostic about the Impacts of Monetary Policy on output and Exchange rate in Developed and Developing Countries: Results from Pure sign Restriction
Elham Saeidinezhad, University of Sheffield

We implement a new methodology for studying the impacts of monetary policy using vector autoregressions. Contrasting with most of the earlier studies, this approach does not need that the simultaneous reaction of some variables to monetary policy shocks be set to zero or require supplementary information, such as the timing of crisis, so as to identify monetary policy shocks.
The paper's approach is an entirely vector autoregressive method which can be generally used. This approach besides has the merits that it can differentiate between the changes in monetary variables caused by monetary policy shocks and those caused by business cycle and fiscal policy shocks. We apply the approach to US, UK, Japan as well as Malaysia, Mexico and South Korea quarterly data from 1988-2009 and obtain remarkable results. Our key findings are that monetary policy seems to have a negligible and somehow ambiguous impact on the output of these countries. Moreover exchange rate is the main difference of these economies, while developing countries experience “delayed over shooting” puzzle, “exchange rate puzzle” is there for most of the studied developed economies. Finally, price puzzle does not happen neither for developed nor for developing economies in our study.

 

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Building Capacities

Using global data to engage social science students with 'quants'
Professor John MacInnes, ESRC

Social science students, even at graduate level are often unconvinced about both the worth of statistics and their own ability to use them. I review the way we use ESDS International and other 'global' data at Edinburgh to convince them of the value of quantitative evidence and their ability to master the relevant methods.

Teaching and Developing Quantitative Skills: A (Personal) View from Development Economics
Dr Markus Eberhardt, ESRC Post-doctoral Research Fellow, University of Oxford

The presentation details the approach to quantitative skills teaching and learning on the undergraduate and postgraduate courses in the Department of Economics, University of Oxford. The training of research students affiliated to the Centre for the Study of African Economies is analysed more closely against the background of a perceived 'quantitative skills gap' among UK graduates and some general conclusions about possible ways to tackle 'the gap' are drawn.

Understanding Official Statistics
Dr Eric Swanson , World Bank

The presentation will begin with an introduction to the "Virtual Statistical System," which was recently released by the World Bank. The VSS is an internet portal giving statisticians access to a wide range of information about the production of official statistics. It is intended to support programs to improve the statistical capacity of developing countries. However, the knowledge base underlying the VSS also provides core information on statistical standards and processes that will be of interest to students and researchers who are using statistical information derived from the work of national statistical offices, such as the World Bank's World Development Indicators. I will also demonstrate the World Bank's Bulletin Board on Statistical Capacity, which provides information on data quality by reporting on the observance of standards by statistical offices.

Unlocking the potential of secondary data: research capacity building among students in the field of Education
Dr Emma Smith, School of Education, University of Birmingham

Over the course of the last decade the amount of secondary data available to researchers has increased considerably and at the same time has become much easier to access. In the field of Education, while some groups of researchers have taken advantage of these resources and used them to great effect, it is often the case that this work has been concentrated among ‘specialists’ who work exclusively with data of this kind. In contrast, large numbers of researchers make very little use of secondary data in their work and often collect primary data in areas where comparable – but higher quality – secondary data already exist. This imbalance in the use of secondary data means that some data sets are being under-used – or being used only for very specific purposes – and that many researchers are missing opportunities to incorporate secondary data into their research.

This lecture considers the use of secondary data sources, including those produced by ESDS, in developing the research skills of undergraduate and postgraduate research students in the field of Education. Taking examples form recent research studies, we will consider the pitfalls and promises of encouraging non-specialist students to engage with secondary data sources.

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