Measuring the Effects of Exchange Rate Changes on Investment. in Australian Manufacturing Industry

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Measuring the Effects of Exchange Rate Changes on Investment. in Australian Manufacturing Industry"

Transcription

1 Measuring he Effecs of Exchange Rae Changes on Invesmen in Ausralian Manufacuring Indusry Robyn Swif Economics and Business Saisics Deparmen of Accouning, Finance and Economics Griffih Universiy Nahan Campus Brisbane Qld 4111 Ausralia Ph: (+61 7) Fax: (+61 7) This research is par of a projec suppored by a Griffih Universiy Research Developmen Gran (GURD)

2 Measuring he Effecs of Exchange Rae Changes on Invesmen in Ausralian Manufacuring Indusry Absrac This paper uses an empirical framework derived from an opimising adjusmen-cos model of invesmen o examine he relaionship beween exchange raes and invesmen in Ausralian manufacuring indusry beween 1988 and The resuls show ha he response of invesmen o exchange rae changes varies wih he exernal exposure of indusry, posiively wih expor share of sales and negaively wih he share of impored inpus ino producion. Indusry compeiive srucure, represened by markup of price over cos, ineracs wih exernal exposure so ha lower levels of markup increase he responsiveness of invesmen o exchange rae changes. For Ausralian manufacuring indusry, a 10% real appreciaion of he Ausralian dollar (AUD) leads o an average 8.0% decrease in oal invesmen hrough he expor share channel over he period, and an average 3.8% increase in oal invesmen hrough he impored inpu share channel, wih mos of he response occurring hrough invesmen in Equipmen, Plan and Machinery. 1. Inroducion There have been subsanial changes in he value of he Ausralian dollar (AUD) over he las decade bu we sill have lile deailed informaion abou he implicaions of hese movemens for Ausralian indusry. There is now a considerable inernaional lieraure on he facors ha influence he iniial sage of he adjusmen process, he change in relaive prices ha follows an exchange rae change, usually referred o as exchange rae passhrough. 1 However, fewer sudies have exended his analysis o invesigae he longer-erm 1 See Goldberg and Kneer (1997) for a comprehensive review of he lieraure on exchange rae pass-hrough and relaed issues.

3 effecs of exchange raes on invesmen and employmen, and only for a limied number of counries (for example, Campa and Goldberg 1995, 1999; Nucci and Pozzolo 2001). This paper uses quarerly daa from 1988 o 2001 o esimae he size and deerminans of he effecs of exchange rae changes on invesmen in Ausralian manufacuring indusry. The opimal level of invesmen for a firm is an increasing funcion of he curren and expeced value of fuure profis. Exchange rae changes influence profis no only hrough changes in he prices of domesically produced goods sold in expor markes bu also hrough changes in he prices of impored goods used as inpus o producion and in he prices of impors ha compee wih domesically produced goods. A firm wih a larger share of sales in expor markes, for example, would be expeced o reduce invesmen in response o an appreciaion of he domesic currency. Conversely, a firm ha is highly dependen on he use of impored inpus ino producion would face a larger drop in variable coss and would consequenly be expeced o increase invesmen following an appreciaion. The exchange rae pass-hrough lieraure has also highlighed he imporance of he compeiive srucure of indusry in deermining he size of he response o exchange rae changes (see, for example, Dornbusch 1987). Firms in more compeiive indusries wih lower price-over-cos markups have less abiliy o absorb exchange rae changes in heir markups so ha he change in prices for hese firms following an exchange rae change will be larger. Lower levels of indusry markups would herefore be expeced o inerac wih, and amplify, he effecs of exernal exposure on invesmen. The few empirical sudies available have generally confirmed he conclusions of he heoreical models. In a cross-counry survey, Campa and Goldberg (1999) esimaed ha a ne increase of around 1-2% in invesmen in oal manufacuring in he USA would follow a 10% appreciaion of he USD, wih a wide variaion expeced in indusry response, ranging from an increase of 12% o a decrease of 8.4%. The auhors showed ha hese resuls were

4 due o he increasing imporance of impored inpus ino manufacuring in he USA. Japanese indusry generally showed a lower level of response, bu wih an overall increase in invesmen also expeced following appreciaion, and a similarly wide range of indusry responses from an increase of 10% o a decrease of 8.3%. Campa and Goldberg (1999) were unable o find any saisical significance in he exchange rae coefficiens for he UK and Canada, which hey found surprising given he size and exen of he exernal orienaion of Canadian manufacuring. However, Nucci and Pozzolo (2001) repored ha he resuls of heir esimaions of a panel daa se of abou 1000 Ialy manufacuring firms also srongly suppored he implicaions of he heoreical model, wih he overall effecs of swings in he exchange rae on a firm s invesmen depending on which of he opposing expor and impored inpu channels prevailed. The res of he paper is organised as follows. Secion 2 oulines a heoreical framework ha explicily incorporaes boh changes in exernal exposure and indusry markups as deerminans of exchange rae effecs on profis and invesmen. The empirical model described in Secion 3 is direcly derived from his framework, and is esimaed for oal invesmen in Ausralian manufacuring indusry and for wo invesmen sub-classes, Equipmen, Plan and Machinery, and Buildings and Srucures. The resuls presened in Secion 4 confirm he effecs of exernal exposure and markups expeced from he heoreical model. They show ha a 10% real appreciaion of he Ausralian dollar (AUD) leads o a ne decrease of 4.2% in oal invesmen on average over he period, he combined effec of an 8.0% decrease hrough he expor share channel, and a 3.8% increase hrough he impored inpu share channel. Almos all of he invesmen response occurs hrough changes in invesmen in Equipmen, Plan and Machinery. Secion 5 draws some final conclusions.

5 2. Theoreical Framework A firm is assumed o choose he opimal level of invesmen each period (I ) o maximise is marke value (V ), which is equivalen o he discouned sum of expeced fuure cash flows. K, he capial sock a he sar of period, is assumed o be quasi-fixed and subjec o a cos of insalling new capial c(i ) ha is increasing and convex, as in a sandard adjusmen cos model (Chirinko 1993). K is also subjec o a sandard capial accumulaion equaion: K (1 δ ) K I (1) where δ is he rae of capial depreciaion. The profi funcion of he firm exposed o exchange rae changes is represened by Π(K, e ) where e is he real exchange rae in unis of domesic currency per uni of foreign currency. Following he model developed by Campa and Goldberg (1999), he maximised value of he firm a ime is expressed as: τ V ( K, e ) max E β [ Π( K { Iτ } τ τ 0 + τ, e + τ ) c( I + τ ) I + τ ] Ω (2) where he cash flow for every period is given by he profi funcion less he overall cos of invesmen, β is he discoun rae, and E[ Ω ] is he expecaions operaor condiional on all informaion available a ime. The firs order condiion derived by maximising he value of he firm in equaion (2) subjec o equaion (1) represens he opimal decision-making rule for invesmen in period. Tha is, he firm should equae expeced marginal profiabiliy, or he discouned sream of expeced fuure profis from an addiional uni of invesmen, o he coss of ha addiional invesmen: E β Π( K, e (3) c I τ + τ + τ ) + K Ω ( ) [ (1 δ ] 1 τ 1 + τ I

6 The model assumes only a cos of adjusmen funcion ha is increasing and convex. However, for ease of exposiion, a sandard quadraic cos funcion wih parameers γ and µ is used: γ 2 2 c ( I ) ( I µ ) (4) Differeniaing equaion (4), subsiuing ino equaion (3) and rearranging gives an expression for I : I 1 1 Π + ( K +, e + ) ( µ τ τ τ ) E [ β (1 δ ] Ω γ γ τ 1 K (5) + τ The firm is assumed o observe he exchange rae each period (e ) and choose oupu for foreign and domesic markes and quaniies of domesic and impored inpus in order o maximise per-period profi: Π ( K, e ) max p( q, e ) q + e p ( q, e ) q w L e w L (6) q, q, L, LT subjec o q + q f ( K, L, L where q and q are he quaniies supplied by he firm o domesic and foreign markes respecively, p ( q, e ) and p ( q, e ) are he demand funcions faced by he firm, w L and e w L are spending on domesically produced and impored inpus, L and L, respecively, and f ( K, L, L ) is homogenous of degree one. The firs order condiions for equaion (6) are combined and he resuling gross profi funcion differeniaed o give an expression for he marginal profiabiliy of capial: Π K, e ) 1 [ MKUP K K ( 1 1 pq + MKUP e p q ( w L + e w L )] (7) where MKUP and MKUP are he firm s price-over-cos markups in he domesic and foreign markes respecively. These can be represened as:

7 MKUP p MC 1 1 (1 + η ) (8) and MKUP e p MC 1 (1 + η 1 ) (9) where MC is marginal cos and η and and foreign markes respecively. η are price elasiciies of demand in he domesic The model assumes for simpliciy ha he only source of uncerainy is he exchange rae, and ha all exchange rae changes are assumed o be permanen. This implies ha he level of he exchange rae in all fuure periods is expeced o be equal o oday s exchange rae, and consequenly he expeced marginal profiabiliy in equaions (3) and (5) is also equal o oday s marginal profiabiliy as expressed in equaion (7). By using equaion (7) o differeniae equaion (5) wih respec o he exchange rae and rearranging, Campa and Goldberg (1999) derive an expression for he invesmen response o exchange rae changes: I e A AMKUP X [( η p, e ηmkup, e )(1 ) + (1 + η η ) p e MKUP e (1 + η,, w, e X α ) de ] e (10) where β TR A γ [ 1 β (1 δ )] K and η p, e and p, e η are he exchange rae pass-hrough elasiciies o domesic and foreign prices respecively, η MKUP, e and MKUP, e η are he exchange rae elasiciies of markups in domesic and foreign markes respecively, TR is oal revenues, X is he share of TR from sales in foreign markes, α is he share of impored inpus in oal producion coss, η is he exchange rae elasiciy of impored inpu coss and AMKUP is he average markup across all markes. w, e

8 The hree main erms inside he square brackes in Equaion (10) idenify he hree channels hrough which exchange rae changes can influence invesmen. Effecs on he profiabiliy of domesic sales (1-X ) will depend on he exchange rae elasiciies of price and markups in he domesic marke. Effecs on profiabiliy of expor sales (X ) will depend on he exchange rae elasiciies of price and markups in foreign markes plus a direc valuaion effec on revenue from expor sales. These effecs on he revenue side will be offse by opposiely signed changes in oal producion coss, which are dependen on he exchange rae elasiciy of impored inpu coss. The price and markup elasiciies are all dependen on he naure of compeiion in he relevan markes (Dornbusch 1987). For perfecly compeiive firms, domesic prices are equal o marginal coss and markups are accordingly zero, so domesic prices and markups are unaffeced by exchange rae changes ( η η 0 ). Domesic prices of expors p, e MKUP, e are also unchanged so he foreign currency price of expors mus rise fully o reflec currency appreciaion, ( η 1), leading o a corresponding reducion in quaniies sold. In p, e addiion, smaller average markups will amplify he effecs on invesmen in compeiive A indusries from all hree channels, hrough ( AMKUP ). Conversely, firms in imperfecly compeiive markes can decrease markups on expored goods following appreciaion o mainain consan foreign currency prices ( η 0), reducing he impac on quaniies sold. The exen o which foreign currency p, e prices change in response o a currency movemen, and he resuling effecs on invesmen, will be direcly relaed o he degree of compeiion in expor markes and inversely relaed o he size of he markups in he indusry. In all indusries, he larger is X, he share of sales in expor markes, he larger will be he effecs from changes in foreign currency prices. Similarly on he impored inpu side,

9 boh more compeiive markes for inpus (smaller markups and larger η w, e ) and a greaer proporion of impored inpus in producion coss (larger α ) will increase he counervailing effecs of impored inpu coss on profiabiliy and invesmen. 3. Empirical Esimaion and Daa The empirical model o be esimaed is derived from equaion (10) as: I β + β ( AMKUP 0 + β α ( AMKUP ) 1 1 ) 1 1 e + β X 2 1 e + β sales 4 ( AMKUP β r 5 ) 1 e + β I ε (11) where I is invesmen in privae new capial expendiure a consan prices, and e is he real rade-weighed exchange rae in unis of domesic currency per uni of foreign currency. From equaion (10), he coefficien β 1 on he firs exchange rae erm is a funcion of ( p, e ηmkup, e) η ) in he domesic marke. The coefficien β 2 on he exchange rae ineraced wih expor share (X ) is a funcion of he valuaion and marke effecs on he expor side ( 1 η η η p, e MKUP, e p, e + ηmkup, e + ). Similarly, he coefficien β 3 on he final exchange rae erm ineraced wih impored inpu share (α ) is a funcion of impored inpu elasiciy ( 1 η w, e + ). All hree exchange rae erms inerac wih average markup (AMKUP ) as in equaion (10), incorporaing he influence of compeiive srucure on exchange rae effecs. The discoun rae included in he erm in A in equaion (10) is represened by he real ineres rae (r ). The esimaion also includes a variable for he growh rae of real oal sales in he indusry ( sales ) o conrol for oher indusry-specific facors ha may have influenced he growh rae of invesmen over he period. The lagged values of he ineracion erms (expor and impored inpu shares and average markup) and he real ineres rae are used o avoid possible correlaion wih he curren exchange rae, and a lag on oal sales o avoid possible correlaion wih curren invesmen. The final erm in lagged invesmen (I -1 ) is

10 included o represen he adjusmen and implemenaion lags generally expeced in invesmen projecs (Driver and Dowrick 1997, Nucci and Pozzolo 2001). The symbol indicaes firs differences in naural logarihms for all variables excep for he real ineres rae, which is differenced in level form. The inclusion of he lagged dependen variable in equaion (11) raises he possibiliy of serial correlaion and subsequen bias in he esimaes. For his reason, insrumenal variables esimaion (2SLS) was employed, wih addiional lags of invesmen and sales included as insrumens. The esimaes were correced for any remaining serial correlaion using he Newey-Wes echnique (Newey and Wes 1987). Equaion (11) was esimaed for oal invesmen in Ausralian Manufacuring indusry (ANZSIC Division C) and for he wo invesmen sub-classes, Equipmen, Plan and Machinery, and Buildings and Srucures, using quarerly daa for he period 1988:Q1 o 2001:Q4. Deails of daa sources are available in he appendix. Expor share (X ) is calculaed as he raio of he value of expors o he value of oal sales of goods and services. Impored inpu share (α ) is consruced from secoral inpu-oupu daa combined wih impor value shares for each inpu secor o give he oal value of impored inpus used in manufacuring indusry. The share of impored inpus in producion is hen derived as he raio of he value of impored inpus o he oal cos of producion, including boh maerials and labour inpus. 2 Marginal coss for he direc calculaion of price-over-cos markups are no observable. Domowiz e al. (1986) sugges a mehod for compuing a measure of profi margin per uni price: Value of Sales + Invenories Payroll Cos of Maerials MK DHP (12) Value of Sales + Invenories 2 Furher deails on he consrucion of his variable and a discussion of changes in measures of exernal exposure for Ausralian manufacuring indusries over he period are provided in Swif (2005).

11 This formula is used o derive a measure for he average markup (AMKUP) as average priceover-average cos o represen marke power in he indusry: 1 AMKUP 1 MK DHP Value of Sales + Invenories Payroll + Cos of Maerials (13) This mehod is no inended o give a definiive measure of indusry markups, bu i does allow he consisen comparison of changes in profi margins over ime as exchange raes change. 4. Resuls The resuls of he esimaion of equaion (11) for oal invesmen and he wo invesmen sub-classes are given in Table 1. For oal invesmen, he exchange rae variables ineraced wih expor shares and impored inpu shares are boh significan and of he expeced sign, indicaing ha an appreciaion (a decrease in e ) leads o a decrease in oal invesmen hrough he expor price channel and an increase hrough he impored inpu prices channel. The resuls for he ineraced erms in he regression for equipmen, plan and machinery are very similar bu wih slighly smaller coefficiens. Invesmen in equipmen, plan and machinery consiued around 85% of oal invesmen on average over he period, consisen wih he resuls obained. The regression for invesmen in buildings and srucures has markedly poorer fi ( R 0.22) and only he lagged dependen variable is significan. Driver and Dowrick (1997) also found less explanaory power in he equaions for buildings and srucures in heir esimaions of he effecs of invesmen inenions on invesmen in Ausralian manufacuring indusry. Invesmen in buildings and srucures is likely o involve much larger coss, suggesing longer lead imes in planning and implemenaion ha may induce lumpiness in 2

12 invesmen spending. The wedge hus creaed beween he benefis and coss embodied in an opimal invesmen policy may lead o parameer and model insabiliy by weakening he link beween invesmen spending and shifs in economic deerminans such as exchange raes (Chirinko 1993). The negaive and significan coefficiens on he one-period lag of invesmen in all hree esimaions, also found by Driver and Dowrick (1997), suppor he idea ha invesmen spending generally has some degree of lumpiness, as higher levels of invesmen spending las period will be followed by lower levels of spending his period whaever he exernal economic condiions. Table 1: Invesmen in Ausralian Manufacuring Indusry (ANZSIC Div. C) 1988:Q1-2001:Q4 Dependen Variable: Invesmen Equipmen, Plan Buildings and Variables Toal Consan (0.058) and Machinery (0.045) Srucures (0.498) (AMKUP -1 ) -1 e (0.932) X -1 (AMKUP -1 ) -1 e (1.962) α -1 (AMKUP -1 ) -1 e (1.914) sales (0.001) r (0.102) I (0.089) (0.658) (1.257) (1.332) (0.001) (0.080) (0.089) (7.736) (25.351) (19.138) (0.010) (0.856) (0.103) 2 R Noe: Each equaion is esimaed using 2SLS and correced for fourh-order serial correlaion. and indicae significance a 5% and 10% levels respecively. Sandard errors are repored in brackes below parameer esimaes.

13 The coefficien on he real ineres rae for he firs wo regressions is significan, bu small and of he wrong sign. To check ha his did no indicae he need o allow for a longer ime delay on he ineres rae effec, all hree equaions were re-esimaed wih lags up o five quarers on he real ineres rae variable. Insignifican lags were eliminaed using he general-o-specific mehodology, bu only he firs lag remained significan in all hree regressions. Ineresingly, Campa and Goldberg (1995) found similar small bu posiive and significan coefficiens in heir esimaions of he effecs of exchange rae changes on invesmen in manufacuring indusry in he Unied Saes. Campa and Goldberg (1995) offered no explanaion for heir findings, bu he relaive size of he coefficiens for boh Ausralia and he USA suppor he general conclusion of neoclassical models of invesmen ha effecs on oupu or sales, as generaed here by exchange rae changes, have he dominan effec on invesmen wih user cos having a minor role (Chirinko 1993). The implicaions for Ausralian indusry of he invesmen effecs of exchange rae changes can be shown by combining he esimaed coefficiens on he ineraced exchange rae erms in Table 1 wih indusry-specific daa on expor share, impored inpu share and markups. Table 2 gives he responses expeced for oal manufacuring indusry and he 2- digi ANZSIC manufacuring sub-divisions following a 10% real appreciaion of he AUD. Ideally, he exchange rae coefficiens would also be allowed o vary beween sub-divisions, bu he figures calculaed here do show he variaion ha can be expeced in effecs beween indusries as a resul of differences in markup and he degree of exernal exposure. A 10% real appreciaion leads o an overall ne decrease of around 4.2% in invesmen for Ausralian manufacuring as a whole, bu effecs vary from a 1.2% ne increase in invesmen for prining, publishing and recording media o a 15% decrease for meal producs. These resuls conras wih hose repored by Campa and Goldberg (1999) in heir cross-

14 counry survey. They esimaed a ne increase in invesmen in oal manufacuring in boh he USA and Japan following a 10% appreciaion of he domesic currency, wih a wider variaion in indusry response han ha found here. Table 2: Esimaed effecs of a 10% real appreciaion of he AUD on invesmen in Ausralian Manufacuring Indusries Invesmen in Toal Invesmen Equipmen, Plan and Machinery Impored Impored Indusry (ANZSIC code) Expor channel inpu channel Expor channel inpu channel Div. C: Toal Manufacuring - 8.0% 3.8% -7.3% 3.1% Sub-Divisions: 21 Food, Beverages and Tobacco - 8.9% % 1.2% Manufacuring 22 Texile, Clohing, Foowear and - 8.3% 4.4% -7.5% 3.6% Leaher Manufacuring 23 Wood and Paper Produc - 2.7% 2.7% -2.5% 2.2% Manufacuring 24 Prining, Publicaion and Recording - 1.0% 2.2% -0.9% 1.8% Media 25 Peroleum, Coal and Chemical - 5.1% 5.0% -4.6% 4.0% Manufacuring 26 Non-Meallic Mineral Produc - 1.0% 1.5% -0.9% 1.2% Manufacuring 27 Meal Produc Manufacuring % 3.3% -15.1% 2.6% 28 Machinery and Equipmen - 8.9% 7.0% -8.0% 5.6% Manufacuring 29 Oher Manufacuring - 4.8% 3.6% -4.3% 2.9% Noe: The esimaes are calculaed using period averages of expor share, impored inpu shares and markups for each indusry, combined wih he relevan coefficiens from Table 1. However, he four Ausralian indusries showing he larges effecs in Table 2 (21, 22, 27 and 28) are hose wih he larges expor shares, averaging over 20% expor share over he period, and in he case of meal producs, over 40%. They are also among he larges subdivisions overall, ogeher averaging more han 60% of he oal sales of he manufacuring indusries. These resuls highligh he coninued imporance of he expor channel for

15 exchange rae effecs for Ausralia. They also emphasise he imporance of counry and indusry-specific influences in deermining he direcion and size of he response o exchange rae changes. The remaining indusries, more han half he indusry sub-divisions (23, 24, 25, 26 and 29), experience ne changes of around 1% or less, indicaing ha even quie subsanial reducions in invesmen hrough he expor price channel can be counerbalanced by gains hrough he prices of impored inpus, as for example in peroleum, coal and chemical producs. 5. Conclusion This paper provides quaniaive measures of he size and direcion of he effecs of exchange rae changes on invesmen in Ausralian manufacuring indusry beween 1988 and The empirical resuls confirm he conclusions of he heoreical model ha he magniude of he effecs varies wih he exernal exposure of indusry, posiively wih expor share of sales and negaively wih he share of impored inpus ino producion. For individual manufacuring subdivisions, he expeced response o a 10% appreciaion of he AUD varies from a 1.2% ne increase in oal invesmen o a 15% ne decrease. For he manufacuring division as a whole, he decrease of around 4.2% is a resul of an 8% decrease in invesmen hrough he expor price channel and a 3.8% increase hrough he impored inpu price channel. Almos all of he invesmen response occurs hrough invesmen in equipmen, plan and machinery. For Ausralia, he esimaes sugges ha expor share remains he mos imporan channel for exchange rae effecs overall, alhough here are significan differences beween indusries. The resuls found here demonsrae he need for furher research o address he

16 deerminans of differences in exchange rae effecs boh beween indusries and beween counries. Appendix 1: Daa Invesmen (I ): Daa on oal invesmen, and invesmen in equipmen, plan and machinery, and buildings and srucures, a curren prices are aken from ABS, Privae New Capial Expendiure and Expeced Expendiure, Ausralia, Ca. no They are deflaed by he chain price indices for oal privae gross fixed capial formaion from ABS, Ausralian Naional Accouns: Naional Income, Expendiure and Produc, Ca no Exchange rae (e ): Daa on he real rade-weighed index are aken from Real Exchange Rae Indices Quarerly on he RBA websie (www.rba.gov.au/saisics/) Ineres rae (r ): The real ineres rae is calculaed as he quarerly average of he ineres rae on wo-year Treasury bonds from RBA, Ineres Raes and Yields: Money Marke and Commonwealh Governmen Securiies, Occasional Paper no. 10 (updaed), minus he expeced change in manufacuring selling prices from ABS, Ausralian Business Expecaions, Ca. no Expor share (X ) and Sales (sales ): The value of expors is aken from ABS, Inernaional Trade in Goods and Services, Ausralia, Ca. no Daa on sales of goods and services are aken from ABS, Business Indicaors, Ausralia, Ca. no Impored Inpu Shares (α i ): Daa on he inpu-oupu srucure of producion are aken from he ABS, Ausralian Naional Accouns: Inpu-Oupu Tables, Ca. no for 1996/97. Impor shares for each inpu indusry are calculaed as he raio of he value of impors from ABS, Inernaional Trade in Goods and Services, Ausralia, Ca. no , o he value of sales of goods and services for each indusry from ABS, Summary of Indusry Performance, Ausralia Ca. no Labour coss are aken from ABS, Wage and Salary

17 Earners, Ausralia, Ca. no , and deflaed by he price index for maerials used in manufacuring from ABS, Producer Price Index, Ca. no Average Markup (AMKUP ): Daa on company gross operaing profis, sales and invenories are aken from ABS, Business Indicaors, Ausralia, Ca. no References Campa, J. and Goldberg, L. S. 1995, 'Invesmen in Manufacuring, Exchange Raes and Exernal Exposure', Journal of Inernaional Economics, vol. 38, no. 3-4, pp Campa, J. M. and Goldberg, L. S. 1999, 'Invesmen, Pass-Through and Exchange Raes: A Cross-Counry Comparison', Inernaional Economic Review, vol. 40, no. 2, pp Chirinko, R. S. 1993, 'Business Fixed Invesmen Spending: Modeling Sraegies, Empirical Resuls, and Policy Implicaions', Journal of Economic Lieraure, vol. XXXI (December), pp Domowiz, I., Hubbard, R. G. and Peersen, B. C. 1986, 'Business Cycles and he Relaionship beween Concenraion and Price-Cos Margins', Rand Journal of Economics, vol. 17, no. 1, pp Dornbusch, R. 1987, 'Exchange Raes and Prices', American Economic Review, vol. 77, no. 1, pp Driver, C. and Dowrick, S. 1997, 'Invesmen Inenions as an Indicaor of Acual Invesmen in Ausralian Manufacuring', Ausralian Economic Papers, vol. 36, no. 68, pp Goldberg, P. K. and Kneer, M. M. 1997, 'Goods Prices and Exchange Raes: Wha Have We Learned?', Journal of Economic Lieraure, vol. 35, no. 3, pp

18 Newey, W. and Wes, K. 1987, 'A Simple Posiive-Definie Heeroskedasiciy and Auocorrelaion Consisen Covariance Marix', Economerica, vol. 55, no. 3, pp Nucci, F. and Pozzolo, A. F. 2001, 'Invesmen and he exchange rae: An analysis wih firmlevel panel daa', European Economic Review, vol. 45, no. 2, pp Swif, R. F. 2005, 'The Changing Exernal Exposure of Ausralian Indusry', Ausralian Economic Review, forhcoming.

Price elasticity of demand for crude oil: estimates for 23 countries

Price elasticity of demand for crude oil: estimates for 23 countries Price elasiciy of demand for crude oil: esimaes for 23 counries John C.B. Cooper Absrac This paper uses a muliple regression model derived from an adapaion of Nerlove s parial adjusmen model o esimae boh

More information

The Greek financial crisis: growing imbalances and sovereign spreads. Heather D. Gibson, Stephan G. Hall and George S. Tavlas

The Greek financial crisis: growing imbalances and sovereign spreads. Heather D. Gibson, Stephan G. Hall and George S. Tavlas The Greek financial crisis: growing imbalances and sovereign spreads Heaher D. Gibson, Sephan G. Hall and George S. Tavlas The enry The enry of Greece ino he Eurozone in 2001 produced a dividend in he

More information

Chapter 6: Business Valuation (Income Approach)

Chapter 6: Business Valuation (Income Approach) Chaper 6: Business Valuaion (Income Approach) Cash flow deerminaion is one of he mos criical elemens o a business valuaion. Everyhing may be secondary. If cash flow is high, hen he value is high; if he

More information

The Real Business Cycle paradigm. The RBC model emphasizes supply (technology) disturbances as the main source of

The Real Business Cycle paradigm. The RBC model emphasizes supply (technology) disturbances as the main source of Prof. Harris Dellas Advanced Macroeconomics Winer 2001/01 The Real Business Cycle paradigm The RBC model emphasizes supply (echnology) disurbances as he main source of macroeconomic flucuaions in a world

More information

INVESTIGATION OF THE INFLUENCE OF UNEMPLOYMENT ON ECONOMIC INDICATORS

INVESTIGATION OF THE INFLUENCE OF UNEMPLOYMENT ON ECONOMIC INDICATORS INVESTIGATION OF THE INFLUENCE OF UNEMPLOYMENT ON ECONOMIC INDICATORS Ilona Tregub, Olga Filina, Irina Kondakova Financial Universiy under he Governmen of he Russian Federaion 1. Phillips curve In economics,

More information

BALANCE OF PAYMENTS. First quarter 2008. Balance of payments

BALANCE OF PAYMENTS. First quarter 2008. Balance of payments BALANCE OF PAYMENTS DATE: 2008-05-30 PUBLISHER: Balance of Paymens and Financial Markes (BFM) Lena Finn + 46 8 506 944 09, lena.finn@scb.se Camilla Bergeling +46 8 506 942 06, camilla.bergeling@scb.se

More information

Premium Income of Indian Life Insurance Industry

Premium Income of Indian Life Insurance Industry Premium Income of Indian Life Insurance Indusry A Toal Facor Produciviy Approach Ram Praap Sinha* Subsequen o he passage of he Insurance Regulaory and Developmen Auhoriy (IRDA) Ac, 1999, he life insurance

More information

A Note on Using the Svensson procedure to estimate the risk free rate in corporate valuation

A Note on Using the Svensson procedure to estimate the risk free rate in corporate valuation A Noe on Using he Svensson procedure o esimae he risk free rae in corporae valuaion By Sven Arnold, Alexander Lahmann and Bernhard Schwezler Ocober 2011 1. The risk free ineres rae in corporae valuaion

More information

4. International Parity Conditions

4. International Parity Conditions 4. Inernaional ariy ondiions 4.1 urchasing ower ariy he urchasing ower ariy ( heory is one of he early heories of exchange rae deerminaion. his heory is based on he concep ha he demand for a counry's currency

More information

Duration and Convexity ( ) 20 = Bond B has a maturity of 5 years and also has a required rate of return of 10%. Its price is $613.

Duration and Convexity ( ) 20 = Bond B has a maturity of 5 years and also has a required rate of return of 10%. Its price is $613. Graduae School of Business Adminisraion Universiy of Virginia UVA-F-38 Duraion and Convexiy he price of a bond is a funcion of he promised paymens and he marke required rae of reurn. Since he promised

More information

DOES TRADING VOLUME INFLUENCE GARCH EFFECTS? SOME EVIDENCE FROM THE GREEK MARKET WITH SPECIAL REFERENCE TO BANKING SECTOR

DOES TRADING VOLUME INFLUENCE GARCH EFFECTS? SOME EVIDENCE FROM THE GREEK MARKET WITH SPECIAL REFERENCE TO BANKING SECTOR Invesmen Managemen and Financial Innovaions, Volume 4, Issue 3, 7 33 DOES TRADING VOLUME INFLUENCE GARCH EFFECTS? SOME EVIDENCE FROM THE GREEK MARKET WITH SPECIAL REFERENCE TO BANKING SECTOR Ahanasios

More information

Chapter 8: Regression with Lagged Explanatory Variables

Chapter 8: Regression with Lagged Explanatory Variables Chaper 8: Regression wih Lagged Explanaory Variables Time series daa: Y for =1,..,T End goal: Regression model relaing a dependen variable o explanaory variables. Wih ime series new issues arise: 1. One

More information

Appendix D Flexibility Factor/Margin of Choice Desktop Research

Appendix D Flexibility Factor/Margin of Choice Desktop Research Appendix D Flexibiliy Facor/Margin of Choice Deskop Research Cheshire Eas Council Cheshire Eas Employmen Land Review Conens D1 Flexibiliy Facor/Margin of Choice Deskop Research 2 Final Ocober 2012 \\GLOBAL.ARUP.COM\EUROPE\MANCHESTER\JOBS\200000\223489-00\4

More information

Why Did the Demand for Cash Decrease Recently in Korea?

Why Did the Demand for Cash Decrease Recently in Korea? Why Did he Demand for Cash Decrease Recenly in Korea? Byoung Hark Yoo Bank of Korea 26. 5 Absrac We explores why cash demand have decreased recenly in Korea. The raio of cash o consumpion fell o 4.7% in

More information

A Brief Introduction to the Consumption Based Asset Pricing Model (CCAPM)

A Brief Introduction to the Consumption Based Asset Pricing Model (CCAPM) A Brief Inroducion o he Consumpion Based Asse Pricing Model (CCAPM We have seen ha CAPM idenifies he risk of any securiy as he covariance beween he securiy's rae of reurn and he rae of reurn on he marke

More information

Measuring macroeconomic volatility Applications to export revenue data, 1970-2005

Measuring macroeconomic volatility Applications to export revenue data, 1970-2005 FONDATION POUR LES ETUDES ET RERS LE DEVELOPPEMENT INTERNATIONAL Measuring macroeconomic volailiy Applicaions o expor revenue daa, 1970-005 by Joël Cariolle Policy brief no. 47 March 01 The FERDI is a

More information

Impact of Debt on Primary Deficit and GSDP Gap in Odisha: Empirical Evidences

Impact of Debt on Primary Deficit and GSDP Gap in Odisha: Empirical Evidences S.R. No. 002 10/2015/CEFT Impac of Deb on Primary Defici and GSDP Gap in Odisha: Empirical Evidences 1. Inroducion The excessive pressure of public expendiure over is revenue receip is financed hrough

More information

Chapter 1.6 Financial Management

Chapter 1.6 Financial Management Chaper 1.6 Financial Managemen Par I: Objecive ype quesions and answers 1. Simple pay back period is equal o: a) Raio of Firs cos/ne yearly savings b) Raio of Annual gross cash flow/capial cos n c) = (1

More information

MACROECONOMIC FORECASTS AT THE MOF A LOOK INTO THE REAR VIEW MIRROR

MACROECONOMIC FORECASTS AT THE MOF A LOOK INTO THE REAR VIEW MIRROR MACROECONOMIC FORECASTS AT THE MOF A LOOK INTO THE REAR VIEW MIRROR The firs experimenal publicaion, which summarised pas and expeced fuure developmen of basic economic indicaors, was published by he Minisry

More information

Relationships between Stock Prices and Accounting Information: A Review of the Residual Income and Ohlson Models. Scott Pirie* and Malcolm Smith**

Relationships between Stock Prices and Accounting Information: A Review of the Residual Income and Ohlson Models. Scott Pirie* and Malcolm Smith** Relaionships beween Sock Prices and Accouning Informaion: A Review of he Residual Income and Ohlson Models Sco Pirie* and Malcolm Smih** * Inernaional Graduae School of Managemen, Universiy of Souh Ausralia

More information

PROFIT TEST MODELLING IN LIFE ASSURANCE USING SPREADSHEETS PART ONE

PROFIT TEST MODELLING IN LIFE ASSURANCE USING SPREADSHEETS PART ONE Profi Tes Modelling in Life Assurance Using Spreadshees PROFIT TEST MODELLING IN LIFE ASSURANCE USING SPREADSHEETS PART ONE Erik Alm Peer Millingon 2004 Profi Tes Modelling in Life Assurance Using Spreadshees

More information

Morningstar Investor Return

Morningstar Investor Return Morningsar Invesor Reurn Morningsar Mehodology Paper Augus 31, 2010 2010 Morningsar, Inc. All righs reserved. The informaion in his documen is he propery of Morningsar, Inc. Reproducion or ranscripion

More information

II.1. Debt reduction and fiscal multipliers. dbt da dpbal da dg. bal

II.1. Debt reduction and fiscal multipliers. dbt da dpbal da dg. bal Quarerly Repor on he Euro Area 3/202 II.. Deb reducion and fiscal mulipliers The deerioraion of public finances in he firs years of he crisis has led mos Member Saes o adop sizeable consolidaion packages.

More information

Individual Health Insurance April 30, 2008 Pages 167-170

Individual Health Insurance April 30, 2008 Pages 167-170 Individual Healh Insurance April 30, 2008 Pages 167-170 We have received feedback ha his secion of he e is confusing because some of he defined noaion is inconsisen wih comparable life insurance reserve

More information

Information technology and economic growth in Canada and the U.S.

Information technology and economic growth in Canada and the U.S. Canada U.S. Economic Growh Informaion echnology and economic growh in Canada and he U.S. Informaion and communicaion echnology was he larges conribuor o growh wihin capial services for boh Canada and he

More information

Why Do Real and Nominal. Inventory-Sales Ratios Have Different Trends?

Why Do Real and Nominal. Inventory-Sales Ratios Have Different Trends? Why Do Real and Nominal Invenory-Sales Raios Have Differen Trends? By Valerie A. Ramey Professor of Economics Deparmen of Economics Universiy of California, San Diego and Research Associae Naional Bureau

More information

The Grantor Retained Annuity Trust (GRAT)

The Grantor Retained Annuity Trust (GRAT) WEALTH ADVISORY Esae Planning Sraegies for closely-held, family businesses The Granor Reained Annuiy Trus (GRAT) An efficien wealh ransfer sraegy, paricularly in a low ineres rae environmen Family business

More information

YTM is positively related to default risk. YTM is positively related to liquidity risk. YTM is negatively related to special tax treatment.

YTM is positively related to default risk. YTM is positively related to liquidity risk. YTM is negatively related to special tax treatment. . Two quesions for oday. A. Why do bonds wih he same ime o mauriy have differen YTM s? B. Why do bonds wih differen imes o mauriy have differen YTM s? 2. To answer he firs quesion les look a he risk srucure

More information

How does working capital management affect SMEs profitability? This paper analyzes the relation between working capital management and profitability

How does working capital management affect SMEs profitability? This paper analyzes the relation between working capital management and profitability How does working capial managemen affec SMEs profiabiliy? Absrac This paper analyzes he relaion beween working capial managemen and profiabiliy for small and medium-sized firms by conrolling for unobservable

More information

SPECIAL REPORT May 4, Shifting Drivers of Inflation Canada versus the U.S.

SPECIAL REPORT May 4, Shifting Drivers of Inflation Canada versus the U.S. Paul Ferley Assisan Chief Economis 416-974-7231 paul.ferley@rbc.com Nahan Janzen Economis 416-974-0579 nahan.janzen@rbc.com SPECIAL REPORT May 4, 2010 Shifing Drivers of Inflaion Canada versus he U.S.

More information

Total factor productivity growth in the Canadian life insurance industry: 1979-1989

Total factor productivity growth in the Canadian life insurance industry: 1979-1989 Toal facor produciviy growh in he Canadian life insurance indusry: 1979-1989 J E F F R E Y I. B E R N S T E I N Carleon Universiy and Naional Bureau of Economic Research 1. Inroducion Produciviy growh

More information

DYNAMIC MODELS FOR VALUATION OF WRONGFUL DEATH PAYMENTS

DYNAMIC MODELS FOR VALUATION OF WRONGFUL DEATH PAYMENTS DYNAMIC MODELS FOR VALUATION OF WRONGFUL DEATH PAYMENTS Hong Mao, Shanghai Second Polyechnic Universiy Krzyszof M. Osaszewski, Illinois Sae Universiy Youyu Zhang, Fudan Universiy ABSTRACT Liigaion, exper

More information

Principal components of stock market dynamics. Methodology and applications in brief (to be updated ) Andrei Bouzaev, bouzaev@ya.

Principal components of stock market dynamics. Methodology and applications in brief (to be updated ) Andrei Bouzaev, bouzaev@ya. Principal componens of sock marke dynamics Mehodology and applicaions in brief o be updaed Andrei Bouzaev, bouzaev@ya.ru Why principal componens are needed Objecives undersand he evidence of more han one

More information

ESTIMATE OF POTENTIAL GROSS DOMESTIC PRODUCT USING THE PRODUCTION FUNCTION METHOD

ESTIMATE OF POTENTIAL GROSS DOMESTIC PRODUCT USING THE PRODUCTION FUNCTION METHOD Economeric Modelling Deparmen Igea Vrbanc June 2006 ESTIMATE OF POTENTIAL GROSS DOMESTIC PRODUCT USING THE PRODUCTION FUNCTION METHOD CONTENTS SUMMARY 1. INTRODUCTION 2. ESTIMATE OF THE PRODUCTION FUNCTION

More information

Vector Autoregressions (VARs): Operational Perspectives

Vector Autoregressions (VARs): Operational Perspectives Vecor Auoregressions (VARs): Operaional Perspecives Primary Source: Sock, James H., and Mark W. Wason, Vecor Auoregressions, Journal of Economic Perspecives, Vol. 15 No. 4 (Fall 2001), 101-115. Macroeconomericians

More information

Consumer sentiment is arguably the

Consumer sentiment is arguably the Does Consumer Senimen Predic Regional Consumpion? Thomas A. Garre, Rubén Hernández-Murillo, and Michael T. Owyang This paper ess he abiliy of consumer senimen o predic reail spending a he sae level. The

More information

Working paper No.3 Cyclically adjusting the public finances

Working paper No.3 Cyclically adjusting the public finances Working paper No.3 Cyclically adjusing he public finances Thora Helgadoir, Graeme Chamberlin, Pavandeep Dhami, Sephen Farringon and Joe Robins June 2012 Crown copyrigh 2012 You may re-use his informaion

More information

The Determinants of Trade Credit: Vietnam Experience

The Determinants of Trade Credit: Vietnam Experience Proceedings of he Second Asia-Pacific Conference on Global Business, Economics, Finance and Social Sciences (AP15Vienam Conference) ISBN: 978-1-63415-833-6 Danang, Vienam, 10-12 July 2015 Paper ID: V536

More information

Bid-ask Spread and Order Size in the Foreign Exchange Market: An Empirical Investigation

Bid-ask Spread and Order Size in the Foreign Exchange Market: An Empirical Investigation Bid-ask Spread and Order Size in he Foreign Exchange Marke: An Empirical Invesigaion Liang Ding* Deparmen of Economics, Macaleser College, 1600 Grand Avenue, S. Paul, MN55105, U.S.A. Shor Tile: Bid-ask

More information

1. Explain why the theory of purchasing power parity is often referred to as the law of one price.

1. Explain why the theory of purchasing power parity is often referred to as the law of one price. Chaper Review Quesions. xplain why he heory of purchasing power pariy is ofen referred o as he law of one price. urchasing ower ariy () is referred o as he law of one price because he deerminaion of he

More information

LIFE INSURANCE WITH STOCHASTIC INTEREST RATE. L. Noviyanti a, M. Syamsuddin b

LIFE INSURANCE WITH STOCHASTIC INTEREST RATE. L. Noviyanti a, M. Syamsuddin b LIFE ISURACE WITH STOCHASTIC ITEREST RATE L. oviyani a, M. Syamsuddin b a Deparmen of Saisics, Universias Padjadjaran, Bandung, Indonesia b Deparmen of Mahemaics, Insiu Teknologi Bandung, Indonesia Absrac.

More information

House Price Index (HPI)

House Price Index (HPI) House Price Index (HPI) The price index of second hand houses in Colombia (HPI), regisers annually and quarerly he evoluion of prices of his ype of dwelling. The calculaion is based on he repeaed sales

More information

Estimating Time-Varying Equity Risk Premium The Japanese Stock Market 1980-2012

Estimating Time-Varying Equity Risk Premium The Japanese Stock Market 1980-2012 Norhfield Asia Research Seminar Hong Kong, November 19, 2013 Esimaing Time-Varying Equiy Risk Premium The Japanese Sock Marke 1980-2012 Ibboson Associaes Japan Presiden Kasunari Yamaguchi, PhD/CFA/CMA

More information

Share prices and the value of workers

Share prices and the value of workers Share prices and he value of workers By Eran Yashiv, Bank of England Houblon-Norman Fellow. (1) Is he value of workers in a company refleced in is share price? Tradiional approaches sugges no. This aricle

More information

Present Value Methodology

Present Value Methodology Presen Value Mehodology Econ 422 Invesmen, Capial & Finance Universiy of Washingon Eric Zivo Las updaed: April 11, 2010 Presen Value Concep Wealh in Fisher Model: W = Y 0 + Y 1 /(1+r) The consumer/producer

More information

INTEREST RATE FUTURES AND THEIR OPTIONS: SOME PRICING APPROACHES

INTEREST RATE FUTURES AND THEIR OPTIONS: SOME PRICING APPROACHES INTEREST RATE FUTURES AND THEIR OPTIONS: SOME PRICING APPROACHES OPENGAMMA QUANTITATIVE RESEARCH Absrac. Exchange-raded ineres rae fuures and heir opions are described. The fuure opions include hose paying

More information

TREASURY WORKING PAPER 01/32

TREASURY WORKING PAPER 01/32 TREASURY WORKING PAPER 01/32 Saving and growh in an open economy Iris Claus, David Haugh, Gran Scobie and Jonas Törnquis Absrac Concern has been raised by an apparen lack of saving in New Zealand. I is

More information

Lecture Note on the Real Exchange Rate

Lecture Note on the Real Exchange Rate Lecure Noe on he Real Exchange Rae Barry W. Ickes Fall 2004 0.1 Inroducion The real exchange rae is he criical variable (along wih he rae of ineres) in deermining he capial accoun. As we shall see, his

More information

Benefit-Cost Analysis

Benefit-Cost Analysis Slide 1 Benefi-Cos Analysis Sco Pearson Sanford Universiy Sco Pearson is Professor Emerius of Agriculural Economics a he Food Research Insiue, Sanford Universiy. He has paricipaed in projecs ha combined

More information

Oil Price Fluctuations and Firm Performance in an Emerging Market: Assessing Volatility and Asymmetric Effect

Oil Price Fluctuations and Firm Performance in an Emerging Market: Assessing Volatility and Asymmetric Effect Journal of Economics, Business and Managemen, Vol., No. 4, November 203 Oil Price Flucuaions and Firm Performance in an Emerging Marke: Assessing Volailiy and Asymmeric Effec Hawai Janor, Aisyah Abdul-Rahman,

More information

The Effect of Public Expenditure Shocks on Macroeconomic Variables in a Real Business Cycle Model. Case Study: Iran

The Effect of Public Expenditure Shocks on Macroeconomic Variables in a Real Business Cycle Model. Case Study: Iran 40 School of Docoral Sudies (European Union) Journal 2010 The Effec of Public Expendiure Shocks on Macroeconomic Variables in a Real Business Cycle Model. Case Sudy: Iran Khosrow Pyraee a, Gholam Reza

More information

Resiliency, the Neglected Dimension of Market Liquidity: Empirical Evidence from the New York Stock Exchange

Resiliency, the Neglected Dimension of Market Liquidity: Empirical Evidence from the New York Stock Exchange Resiliency, he Negleced Dimension of Marke Liquidiy: Empirical Evidence from he New York Sock Exchange Jiwei Dong 1 Lancaser Universiy, U.K. Alexander Kempf Universiä zu Köln, Germany Pradeep K. Yadav

More information

Research on Inventory Sharing and Pricing Strategy of Multichannel Retailer with Channel Preference in Internet Environment

Research on Inventory Sharing and Pricing Strategy of Multichannel Retailer with Channel Preference in Internet Environment Vol. 7, No. 6 (04), pp. 365-374 hp://dx.doi.org/0.457/ijhi.04.7.6.3 Research on Invenory Sharing and Pricing Sraegy of Mulichannel Reailer wih Channel Preference in Inerne Environmen Hanzong Li College

More information

Risk Modelling of Collateralised Lending

Risk Modelling of Collateralised Lending Risk Modelling of Collaeralised Lending Dae: 4-11-2008 Number: 8/18 Inroducion This noe explains how i is possible o handle collaeralised lending wihin Risk Conroller. The approach draws on he faciliies

More information

I. Basic Concepts (Ch. 1-4)

I. Basic Concepts (Ch. 1-4) (Ch. 1-4) A. Real vs. Financial Asses (Ch 1.2) Real asses (buildings, machinery, ec.) appear on he asse side of he balance shee. Financial asses (bonds, socks) appear on boh sides of he balance shee. Creaing

More information

Graphing the Von Bertalanffy Growth Equation

Graphing the Von Bertalanffy Growth Equation file: d:\b173-2013\von_beralanffy.wpd dae: Sepember 23, 2013 Inroducion Graphing he Von Beralanffy Growh Equaion Previously, we calculaed regressions of TL on SL for fish size daa and ploed he daa and

More information

One dictionary: Native language - English/English - native language or English - English

One dictionary: Native language - English/English - native language or English - English Faculy of Social Sciences School of Business Corporae Finance Examinaion December 03 English Dae: Monday 09 December, 03 Time: 4 hours/ 9:00-3:00 Toal number of pages including he cover page: 5 Toal number

More information

is a random vector with zero mean and Var(e

is a random vector with zero mean and Var(e Economics Leers 73 (2001) 147 153 www.elsevier.com/ locae/ econbase Esimaion of direc and indirec impac of oil price on growh Tilak Abeysinghe* Deparmen of Economics, Naional Universiy of Singapore, 10Ken

More information

Supplementary Appendix for Depression Babies: Do Macroeconomic Experiences Affect Risk-Taking?

Supplementary Appendix for Depression Babies: Do Macroeconomic Experiences Affect Risk-Taking? Supplemenary Appendix for Depression Babies: Do Macroeconomic Experiences Affec Risk-Taking? Ulrike Malmendier UC Berkeley and NBER Sefan Nagel Sanford Universiy and NBER Sepember 2009 A. Deails on SCF

More information

Impact of regional trade agreements on commodity trade between China and Australia

Impact of regional trade agreements on commodity trade between China and Australia Impac of regional rade agreemens on commodiy rade beween China and Ausralia Tianshu Liu, Xuean Jiao * May 2006 Absrac This paper aims o analyse he impac of curren regional rade agreemens on commodiy rade

More information

Determinants of Capital Structure: Comparison of Empirical Evidence from the Use of Different Estimators

Determinants of Capital Structure: Comparison of Empirical Evidence from the Use of Different Estimators Serrasqueiro and Nunes, Inernaional Journal of Applied Economics, 5(1), 14-29 14 Deerminans of Capial Srucure: Comparison of Empirical Evidence from he Use of Differen Esimaors Zélia Serrasqueiro * and

More information

USE OF EDUCATION TECHNOLOGY IN ENGLISH CLASSES

USE OF EDUCATION TECHNOLOGY IN ENGLISH CLASSES USE OF EDUCATION TECHNOLOGY IN ENGLISH CLASSES Mehme Nuri GÖMLEKSİZ Absrac Using educaion echnology in classes helps eachers realize a beer and more effecive learning. In his sudy 150 English eachers were

More information

Forestry profitability panel dataset

Forestry profitability panel dataset Foresry profiabiliy panel daase Wei Zhang, Mou Research Daa Documenaion Mou Economic and Public Policy Research Dae accessed/creaed: Augus 2010 Mou Ref ID: U9970 Suggesed Ciaion: Zhang, Wei. "Foresry Profiabiliy

More information

ARCH 2013.1 Proceedings

ARCH 2013.1 Proceedings Aricle from: ARCH 213.1 Proceedings Augus 1-4, 212 Ghislain Leveille, Emmanuel Hamel A renewal model for medical malpracice Ghislain Léveillé École d acuaria Universié Laval, Québec, Canada 47h ARC Conference

More information

A Conceptual Framework for Commercial Property Price Indexes

A Conceptual Framework for Commercial Property Price Indexes Gran-in-Aid for Scienific Research(S) Real Esae Markes, Financial Crisis, and Economic Growh : An Inegraed Economic Approach Working Paper Series No.4 A Concepual Framework for Commercial Propery Price

More information

Economics Honors Exam 2008 Solutions Question 5

Economics Honors Exam 2008 Solutions Question 5 Economics Honors Exam 2008 Soluions Quesion 5 (a) (2 poins) Oupu can be decomposed as Y = C + I + G. And we can solve for i by subsiuing in equaions given in he quesion, Y = C + I + G = c 0 + c Y D + I

More information

Performance of Egyptian Cotton Exports in International Market

Performance of Egyptian Cotton Exports in International Market Agriculural Economics Research Review Vol. 22 July-December 2009 pp 225-235 Performance of Egypian Coon Expors in Inernaional Marke Assem Abu Haab* Program of Inernaional Trade & Policy of Agriculural

More information

MEDDELANDEN FRÅN SVENSKA HANDELSHÖGSKOLAN SWEDISH SCHOOL OF ECONOMICS AND BUSINESS ADMINISTRATION WORKING PAPERS

MEDDELANDEN FRÅN SVENSKA HANDELSHÖGSKOLAN SWEDISH SCHOOL OF ECONOMICS AND BUSINESS ADMINISTRATION WORKING PAPERS MEDDELANDEN FRÅN SVENSKA HANDELSHÖGSKOLAN SWEDISH SCHOOL OF ECONOMICS AND BUSINESS ADMINISTRATION WORKING PAPERS 3 Jukka Liikanen, Paul Soneman & Oo Toivanen INTERGENERATIONAL EFFECTS IN THE DIFFUSION

More information

Understanding China s High Investment Rate and FDI Levels: A Comparative Analysis of the Return to Capital in China, the United States, and Japan

Understanding China s High Investment Rate and FDI Levels: A Comparative Analysis of the Return to Capital in China, the United States, and Japan Undersanding China s High Invesmen Rae and FDI Levels: A Comparaive Analysis of he Reurn o Capial in China, he Unied Saes, and Japan Wenkai Sun, Renmin Universiy of China Xiuke Yang, Peking Universiy Geng

More information

Chapter 7. Response of First-Order RL and RC Circuits

Chapter 7. Response of First-Order RL and RC Circuits Chaper 7. esponse of Firs-Order L and C Circuis 7.1. The Naural esponse of an L Circui 7.2. The Naural esponse of an C Circui 7.3. The ep esponse of L and C Circuis 7.4. A General oluion for ep and Naural

More information

Internal and External Factors for Credit Growth in Macao

Internal and External Factors for Credit Growth in Macao Inernal and Exernal Facors for Credi Growh in Macao Nicholas Cheang Research and Saisics Deparmen, Moneary Auhoriy of Macao Absrac Commercial banks are dominan eniies in he Macao financial secor. They

More information

Terms of Trade and Present Value Tests of Intertemporal Current Account Models: Evidence from the United Kingdom and Canada

Terms of Trade and Present Value Tests of Intertemporal Current Account Models: Evidence from the United Kingdom and Canada Terms of Trade and Presen Value Tess of Ineremporal Curren Accoun Models: Evidence from he Unied Kingdom and Canada Timohy H. Goodger Universiy of Norh Carolina a Chapel Hill November 200 Absrac This paper

More information

The impact of foreign direct investment and trade on economic. growth Taking China, Korea, Malaysia, Philippines & Thailand for.

The impact of foreign direct investment and trade on economic. growth Taking China, Korea, Malaysia, Philippines & Thailand for. Dec. 2009, Volume 8, No.12 (Serial No.78) China-USA Business Review, ISSN 1537-1514, USA The impac of foreign direc invesmen and rade on economic growh Taking China, Korea, Malaysia, Philippines & Thailand

More information

Markit Excess Return Credit Indices Guide for price based indices

Markit Excess Return Credit Indices Guide for price based indices Marki Excess Reurn Credi Indices Guide for price based indices Sepember 2011 Marki Excess Reurn Credi Indices Guide for price based indices Conens Inroducion...3 Index Calculaion Mehodology...4 Semi-annual

More information

The Economic Value of Medical Research

The Economic Value of Medical Research The Economic Value of Medical Research Kevin M. Murphy Rober Topel Universiy of Chicago Universiy of Chicago March 1998 Revised Sepember, 1999 Absrac Basic research is a public good, for which social reurns

More information

THE FIRM'S INVESTMENT DECISION UNDER CERTAINTY: CAPITAL BUDGETING AND RANKING OF NEW INVESTMENT PROJECTS

THE FIRM'S INVESTMENT DECISION UNDER CERTAINTY: CAPITAL BUDGETING AND RANKING OF NEW INVESTMENT PROJECTS VII. THE FIRM'S INVESTMENT DECISION UNDER CERTAINTY: CAPITAL BUDGETING AND RANKING OF NEW INVESTMENT PROJECTS The mos imporan decisions for a firm's managemen are is invesmen decisions. While i is surely

More information

Does Stock Price Synchronicity Represent Firm-Specific Information? The International Evidence

Does Stock Price Synchronicity Represent Firm-Specific Information? The International Evidence Does Sock Price Synchroniciy Represen Firm-Specific Informaion? The Inernaional Evidence Hollis Ashbaugh-Skaife Universiy of Wisconsin Madison 975 Universiy Avenue Madison, WI 53706 608-63-7979 hashbaugh@bus.wisc.edu

More information

The Influence of Iran's Entrance into the WTO on Major Indexes of Tehran Stock Exchange

The Influence of Iran's Entrance into the WTO on Major Indexes of Tehran Stock Exchange 2013, TexRoad Publicaion ISSN: 2090-4274 Journal of Applied Environmenal and Biological Sciences www.exroad.com The Influence of Iran's Enrance ino he WTO on Major Indexes of Tehran Sock Exchange Darush

More information

Market Liquidity and the Impacts of the Computerized Trading System: Evidence from the Stock Exchange of Thailand

Market Liquidity and the Impacts of the Computerized Trading System: Evidence from the Stock Exchange of Thailand 36 Invesmen Managemen and Financial Innovaions, 4/4 Marke Liquidiy and he Impacs of he Compuerized Trading Sysem: Evidence from he Sock Exchange of Thailand Sorasar Sukcharoensin 1, Pariyada Srisopisawa,

More information

Noisy Inventory Announcements and Energy Prices. Marketa W. Halova, Alexander Kurov and Oleg Kucher. June 2013

Noisy Inventory Announcements and Energy Prices. Marketa W. Halova, Alexander Kurov and Oleg Kucher. June 2013 Noisy Invenory Announcemens and Energy Prices Markea W. Halova, Alexander Kurov and Oleg Kucher June 2013 Forhcoming, Journal of Fuures Markes Absrac This sudy examines he effec of oil and gas invenory

More information

Cannibalization and Product Life Cycle Management

Cannibalization and Product Life Cycle Management Middle-Eas Journal of Scienific Research 19 (8): 1080-1084, 2014 ISSN 1990-9233 IDOSI Publicaions, 2014 DOI: 10.5829/idosi.mejsr.2014.19.8.11868 Cannibalizaion and Produc Life Cycle Managemen Ali Farrukh

More information

Revisions to Nonfarm Payroll Employment: 1964 to 2011

Revisions to Nonfarm Payroll Employment: 1964 to 2011 Revisions o Nonfarm Payroll Employmen: 1964 o 2011 Tom Sark December 2011 Summary Over recen monhs, he Bureau of Labor Saisics (BLS) has revised upward is iniial esimaes of he monhly change in nonfarm

More information

Market Analysis and Models of Investment. Product Development and Whole Life Cycle Costing

Market Analysis and Models of Investment. Product Development and Whole Life Cycle Costing The Universiy of Liverpool School of Archiecure and Building Engineering WINDS PROJECT COURSE SYNTHESIS SECTION 3 UNIT 11 Marke Analysis and Models of Invesmen. Produc Developmen and Whole Life Cycle Cosing

More information

The Effect of Working Capital Management on Reducing the Stock Price Crash Risk(Case Study: Companies Listed in Tehran Stock Exchange)

The Effect of Working Capital Management on Reducing the Stock Price Crash Risk(Case Study: Companies Listed in Tehran Stock Exchange) Inernaional Research Journal of Applied and Basic Sciences 2013 Available online a www.irjabs.com ISSN 2251-838X / Vol, 6 (9): 1222-1228 Science Explorer Publicaions The Effec of Working Capial Managemen

More information

Working Paper No. 482. Net Intergenerational Transfers from an Increase in Social Security Benefits

Working Paper No. 482. Net Intergenerational Transfers from an Increase in Social Security Benefits Working Paper No. 482 Ne Inergeneraional Transfers from an Increase in Social Securiy Benefis By Li Gan Texas A&M and NBER Guan Gong Shanghai Universiy of Finance and Economics Michael Hurd RAND Corporaion

More information

Does International Trade Stabilize Exchange Rate Volatility?

Does International Trade Stabilize Exchange Rate Volatility? Does Inernaional Trade Sabilize Exchange Rae Volailiy? Hui-Kuan Tseng, Kun-Ming Chen, and Chia-Ching Lin * Absrac Since he early 980s, major indusrial counries have been suffering severe muli-laeral rade

More information

When Is Growth Pro-Poor? Evidence from a Panel of Countries

When Is Growth Pro-Poor? Evidence from a Panel of Countries Forhcoming, Journal of Developmen Economics When Is Growh Pro-Poor? Evidence from a Panel of Counries Aar Kraay The World Bank Firs Draf: December 2003 Revised: December 2004 Absrac: Growh is pro-poor

More information

The Impact of International Oil Price Fluctuation on China s Economy

The Impact of International Oil Price Fluctuation on China s Economy Available online a www.sciencedirec.com Energ Procedia 5 (2011) 1360 1364 IACEED2010 The Impac of Inernaional Oil Price Flucuaion on China s Econom Zhang Qianqian School of Economics and Managemen, Wuhan

More information

STATE BANK OF PAKISTAN WORKING PAPERS. Exchange Rate Pass-Through to Domestic Prices in Pakistan. Zulfiqar Hyder Sardar Shah

STATE BANK OF PAKISTAN WORKING PAPERS. Exchange Rate Pass-Through to Domestic Prices in Pakistan. Zulfiqar Hyder Sardar Shah STATE BANK OF PAKISTAN WORKING PAPERS No. 5 June 2004 Exchange Rae Pass-Through o Domesic Prices in Pakisan by Zulfiqar Hyder Sardar Shah Sae Bank of Pakisan Working Paper No. 5, June 2004 Exchange Rae

More information

Interest Rates and the Market For New Light Vehicles

Interest Rates and the Market For New Light Vehicles Federal Reserve Bank of New York Saff Repors Ineres Raes and he Marke For New Ligh Vehicles Adam Copeland George Hall Louis Maccini Saff Repor No. 741 Sepember 2015 This paper presens preliminary findings

More information

The Causes of Recent Inflation in Vietnam: Evidence from a. VAR with Sign Restrictions

The Causes of Recent Inflation in Vietnam: Evidence from a. VAR with Sign Restrictions The Causes of Recen Inflaion in Vienam: Evidence from a VAR wih Sign Resricions Tuan Khai Vu Faculy of Economics, Seikei Universiy Firs version: Jan,. This version: May,. (Preliminary. Commens are welcome.)

More information

Investigation of the effect of the degree of openness of the economy on real effective exchange rate Volatility: case study (the Iran economy)

Investigation of the effect of the degree of openness of the economy on real effective exchange rate Volatility: case study (the Iran economy) saqartvelos mecnierebata erovnuli akademiis moambe,. 9, #2, 2015 BULLETIN OF THE GEORGIAN NATIONAL ACADEMY OF SCIENCES, vols. 9, no. 2, 2015 Economy Invesigaion of he effec of he degree of openness of

More information

CURRENT ACCOUNTS IN THE EURO AREA: AN INTERTEMPORAL APPROACH. José Manuel Campa and Ángel Gavilán an. Documentos de Trabajo N.

CURRENT ACCOUNTS IN THE EURO AREA: AN INTERTEMPORAL APPROACH. José Manuel Campa and Ángel Gavilán an. Documentos de Trabajo N. CURRENT ACCOUNTS IN THE EURO AREA: AN INTERTEMPORAL APPROACH 2006 José Manuel Campa and Ángel Gavilán an Documenos de Trabajo N.º 0638 CURRENT ACCOUNTS IN THE EURO AREA: AN INTERTEMPORAL APPROACH CURRENT

More information

Hiring as Investment Behavior

Hiring as Investment Behavior Review of Economic Dynamics 3, 486522 Ž 2000. doi:10.1006redy.1999.0084, available online a hp:www.idealibrary.com on Hiring as Invesmen Behavior Eran Yashiv 1 The Eian Berglas School of Economics, Tel

More information

SPEC model selection algorithm for ARCH models: an options pricing evaluation framework

SPEC model selection algorithm for ARCH models: an options pricing evaluation framework Applied Financial Economics Leers, 2008, 4, 419 423 SEC model selecion algorihm for ARCH models: an opions pricing evaluaion framework Savros Degiannakis a, * and Evdokia Xekalaki a,b a Deparmen of Saisics,

More information

Temi di discussione. del Servizio Studi

Temi di discussione. del Servizio Studi Temi di discussione del Servizio Sudi Is here a cos channel of moneary policy ransmission? An invesigaion ino he pricing behaviour of 2,000 firms by Eugenio Gaioi and Alessandro Secchi Number 525 - December

More information

Capital Flows and Current Account Sustainability: The Ghanaian Experience

Capital Flows and Current Account Sustainability: The Ghanaian Experience CREDIT Research Paper No. 07/07 Capial Flows and Curren Accoun Susainabiliy: The Ghanaian Experience by Absrac Maxwell Opoku-Afari Boh heoreical and operaional definiions of curren accoun susainabiliy

More information

Predicting Stock Market Index Trading Signals Using Neural Networks

Predicting Stock Market Index Trading Signals Using Neural Networks Predicing Sock Marke Index Trading Using Neural Neworks C. D. Tilakarane, S. A. Morris, M. A. Mammadov, C. P. Hurs Cenre for Informaics and Applied Opimizaion School of Informaion Technology and Mahemaical

More information

Global Financial Crisis, Competition and Loan Pricing in Australia. Ming-Hua Liu a, Dimitris Margaritis b* Zhuo Qiao c. Abstract

Global Financial Crisis, Competition and Loan Pricing in Australia. Ming-Hua Liu a, Dimitris Margaritis b* Zhuo Qiao c. Abstract Global Financial Crisis, Compeiion and Loan Pricing in Ausralia By Ming-Hua Liu a, Dimiris Margariis b* Zhuo Qiao c Absrac In his sudy, we examine he impac of he global financial crisis on he pricing of

More information

Phillips Curve. Macroeconomics Cunningham

Phillips Curve. Macroeconomics Cunningham Phillips Curve Macroeconomics Cunningham Original Phillips Curve A. W. Phillips (1958), The Relaion Beween Unemploymen and he Rae of Change of Money Wage Raes in he Unied Kingdom, 1861-1957, Economica.

More information