Jamus Lim - Academia.edu (original) (raw)
Papers by Jamus Lim
Public Choice, 2020
Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Liter... more Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature Central bank governors and their independence What do these three besuited individuals have in common? (Other than the obvious fact that they are all men with slightly pained looks on their faces) Lim Central Bank Independence 2/30 Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature Central bank governors and their independence What do these three besuited individuals have in common? (Other than the obvious fact that they are all men with slightly pained looks on their faces) Lim Central Bank Independence 3/30 Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature The importance of central bank independence in theory and practice Central bank independence is the lynchpin of academic belief in credible monetary policymaking This argument is the hallmark of economists' pushback against recent threats to central bank governance It has also been almost unambiguously been embraced by governments worldwide Independent monetary authorities also represent an inherent tension in democracies They outsource a powerful policy instrument to unelected bureaucrats But a transparent monetary commitment also complements democratic transparency Lim Central Bank Independence They outsource a powerful policy instrument to unelected bureaucrats But a transparent monetary commitment also complements democratic transparency Lim Central Bank Independence Multiple veto players in democracies can affect the effectiveness of central bank independence and its inflationary stance (Keefer & Stasavage 2002, 2003) Independence is a transparent monetary commitment that can reinforce the transparency of democratic systems to produce low-inflation outcomes (Broz 2002) Democracies that emphasize rule of law while allowing independent central banking offer the discipline and credibility necessary for low inflation (Bodea & Hicks 2015) Lim Central Bank Independence Relying on interactions misses the way democracies decentralize societal decisionmaking Decentralized policymaking applies to monetary policy too Democracies exhibit an average independence score of 1.7 versus 1.5 for nondemocracies Democracy positively correlated with independence Recognizing this relationship (and the absence of one with respect to inflation) unlocks the relevance of democracy as an instrument for independence Lim Central Bank Independence 5/30 Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature Exploiting the explanatory power of democracy to isolate independence effect Relying on interactions misses the way democracies decentralize societal decisionmaking Decentralized policymaking applies to monetary policy too Democracies exhibit an average independence score of 1.7 versus 1.5 for nondemocracies Democracy positively correlated with independence Recognizing this relationship (and the absence of one with respect to inflation) unlocks the relevance of democracy as an instrument for independence Lim Central Bank Independence Expanded spatial-temporal coverage necessitates extra attention to parameter heterogeneity alongside endogeneity Lim Central Bank Independence Subsamples by income level Decompose central bank independence Clarify transmission channels via interaction effects Variability of inflation Lim Central Bank Independence Subsamples by income level Decompose central bank independence Clarify transmission channels via interaction effects Variability of inflation Lim Central Bank Independence Inflation Democracy Source: Author's calculations, from World Bank (2018) and Marshall, Gurr & Jaggers (2015) Lim Central Bank Independence Implication: Clear endogeneity problem that has to be resolved for appropriate inference (Brumm 2011; Crowe & Meade 2008) Lim Central Bank Independence Implication: Clear endogeneity problem that has to be resolved for appropriate inference (Brumm 2011; Crowe & Meade 2008) Lim Central Bank Independence Panel specification includes either fixed effects or multifactor error structure to absorb additional unobserved heterogeneity Robustness check includes level of development as additional control in first stage (higher per capita incomes operate through wide range of channels) Lim Central Bank Independence World Development Indicators International Financial Statistics World Bank Commodity Database Main dependent: CPI inflation Main independent: De jure central bank independence (Garriga 2016
European Journal of Political Economy, 2020
It is well-recognized that fiscal spending in developing countries tend to display significant pr... more It is well-recognized that fiscal spending in developing countries tend to display significant procyclicality (increased spending during expansions and vice versa), in contravention of rational stabilization policy. Theoretical explanations have relied on either financial access or political-economic factors to justify this phenomenon. In this paper, we model the fiscal-output relationship as a dcc-garch process, and inquire whether debt or political economy constraints play a comparatively more important role in conditioning this correlation. Our evidence favors a positive effect from political economy, with weaker and more mixed results pertaining to financial access. Somewhat surprisingly, we also find that politics-induced procyclicality appears to be driven by advanced economies, and fiscal rules exacerbate procyclical tendencies.
Journal of International Money and Finance, Nov 1, 2016
A.1. Additional tables Table A.1: Timeline and magnitude of quantitative easing operations in the... more A.1. Additional tables Table A.1: Timeline and magnitude of quantitative easing operations in the US, UK, Euro Area, and Japan, and coding scheme Episode Coding Description QE1 2009Q1-2010Q3 Major purchases by the US Fed of mortgage-backed securities and other "toxic assets" in the early stages of the crisis beginning in late 2008. By March 2009, the Fed had announced intentions to purchase financial assets totaling nearly 1.7trillion.QE22010Q4−2011Q2AprogramofFedpurchasesofUSTreasurysecuritiesinthesecondhalfof2010,withannouncedpurchasesof1.7 trillion. QE2 2010Q4-2011Q2 A program of Fed purchases of US Treasury securities in the second half of 2010, with announced purchases of 1.7trillion.QE22010Q4−2011Q2AprogramofFedpurchasesofUSTreasurysecuritiesinthesecondhalfof2010,withannouncedpurchasesof600 billion. QE3 *
RePEc: Research Papers in Economics, 2021
Info, Oct 1, 2002
The Information Economy has captured the imagination of all levels of society. Yet very often, an... more The Information Economy has captured the imagination of all levels of society. Yet very often, analyses tend to reflect personal biases or propose incredulous scenarios. This essay does not seek to rewrite old rules for a new economy; rather, it seeks to provide a balanced perspective on opportunities and challenges facing East Asia, using a multidisciplinary approach. It finds that although these countries differ in their levels of development in the Information Economy, their prospects of growth depend on the policies that they choose to pursue. Deliberations on economic issues (such as the potential for productivity gains from ICT), political concerns (including the need to cope with changing government-people dynamics), and social changes (such as the diminution of local cultures and the widening digital divide) often involve both costs as well as benefits. The optimal balance is likely to differ between countries, with no clear model answers.
Journal of Banking and Finance, Jun 1, 2019
A.1. Theoretical models of total debt and growth This annex section formally sketches out several... more A.1. Theoretical models of total debt and growth This annex section formally sketches out several channels by which aggregate debt can affect growth dynamics. First, consider a standard Ramsey-Cass-Koopman setting, with perfect foresight. The decentralized economy is comprised of firms, households, and government. The production side is populated by identical, perfectly-competitive firms that rely on labor N and capital K as inputs for production, using labor-augmenting technology A, represented in intensive form at a given time s by y s = f (k s) , (A.1) where y ≡ Y /AN and k ≡ K/AN are output and capital per efficiency unit of labor, respectively, and (A.1) is assumed to be strictly increasing and concave, and satisfy the Inada conditions f (0) = 0, f (0) = ∞, and f (∞) = 0. To ensure interior solutions of interest, we also let k t > 0. Labor and technology grow at constant rates, according toṄ /N = ν andȦ/A = φ (where the dot above a variable indicates its time derivative). Given the competitive environment, firms take wages w and the rental rate r as given, and a representative firm thus solves the program max ks f (k s) − w s − r s k s ∀s. The first order condition for this problem equates the marginal product of capital to the rental rate f (k s) = r s , and with the zero profit condition in equilibrium, Euler's Theorem implies that output is f (k s) = w s + r s k s. The consumption side is composed of a continuum of homogenous, infinitely-lived households, each endowed with a unit of labor that is supplied inelastically in exchange for wages, and providing capital inelastially as a result of past decisions. Households maximize lifetime utility, which is represented by the discounted sum of instantaneous felicities: ∞ s=t exp [−ρ (s − t)] u (c s) ds, (A.2) where c ≡ C/AN is per-effective worker consumption, and ρ is the household's subjective discount factor. The felicity function in (A.2) is assumed to be strictly increasing and concave, and satisfy the conditions u (0) = ∞, and u (∞) = 0. Households face a dynamic budget constraint where assets a are accumulated viaȧ s = (r s − ν s) a s (τ s) + w s + z s − c s ∀s, (A.3) where current assets are potentially subject to taxation τ , and households may receive a transfer z s from the government. Assets (wealth) are equal to capital k and government bond d holdings,
The World Bank eBooks, Aug 23, 2010
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
Review of Development Economics, Apr 13, 2016
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
Journal of Southeast Asian economies, 2001
World Bank, Washington, DC eBooks, Mar 1, 2019
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
World Bank policy research working paper, Sep 1, 2011
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
Routledge eBooks, Jul 6, 2022
Economics of Transition, Mar 19, 2012
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
Public Choice, Jan 2, 2020
Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Liter... more Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature Central bank governors and their independence What do these three besuited individuals have in common? (Other than the obvious fact that they are all men with slightly pained looks on their faces) Lim Central Bank Independence 2/30 Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature Central bank governors and their independence What do these three besuited individuals have in common? (Other than the obvious fact that they are all men with slightly pained looks on their faces) Lim Central Bank Independence 3/30 Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature The importance of central bank independence in theory and practice Central bank independence is the lynchpin of academic belief in credible monetary policymaking This argument is the hallmark of economists' pushback against recent threats to central bank governance It has also been almost unambiguously been embraced by governments worldwide Independent monetary authorities also represent an inherent tension in democracies They outsource a powerful policy instrument to unelected bureaucrats But a transparent monetary commitment also complements democratic transparency Lim Central Bank Independence They outsource a powerful policy instrument to unelected bureaucrats But a transparent monetary commitment also complements democratic transparency Lim Central Bank Independence Multiple veto players in democracies can affect the effectiveness of central bank independence and its inflationary stance (Keefer & Stasavage 2002, 2003) Independence is a transparent monetary commitment that can reinforce the transparency of democratic systems to produce low-inflation outcomes (Broz 2002) Democracies that emphasize rule of law while allowing independent central banking offer the discipline and credibility necessary for low inflation (Bodea & Hicks 2015) Lim Central Bank Independence Relying on interactions misses the way democracies decentralize societal decisionmaking Decentralized policymaking applies to monetary policy too Democracies exhibit an average independence score of 1.7 versus 1.5 for nondemocracies Democracy positively correlated with independence Recognizing this relationship (and the absence of one with respect to inflation) unlocks the relevance of democracy as an instrument for independence Lim Central Bank Independence 5/30 Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature Exploiting the explanatory power of democracy to isolate independence effect Relying on interactions misses the way democracies decentralize societal decisionmaking Decentralized policymaking applies to monetary policy too Democracies exhibit an average independence score of 1.7 versus 1.5 for nondemocracies Democracy positively correlated with independence Recognizing this relationship (and the absence of one with respect to inflation) unlocks the relevance of democracy as an instrument for independence Lim Central Bank Independence Expanded spatial-temporal coverage necessitates extra attention to parameter heterogeneity alongside endogeneity Lim Central Bank Independence Subsamples by income level Decompose central bank independence Clarify transmission channels via interaction effects Variability of inflation Lim Central Bank Independence Subsamples by income level Decompose central bank independence Clarify transmission channels via interaction effects Variability of inflation Lim Central Bank Independence Inflation Democracy Source: Author's calculations, from World Bank (2018) and Marshall, Gurr & Jaggers (2015) Lim Central Bank Independence Implication: Clear endogeneity problem that has to be resolved for appropriate inference (Brumm 2011; Crowe & Meade 2008) Lim Central Bank Independence Implication: Clear endogeneity problem that has to be resolved for appropriate inference (Brumm 2011; Crowe & Meade 2008) Lim Central Bank Independence Panel specification includes either fixed effects or multifactor error structure to absorb additional unobserved heterogeneity Robustness check includes level of development as additional control in first stage (higher per capita incomes operate through wide range of channels) Lim Central Bank Independence World Development Indicators International Financial Statistics World Bank Commodity Database Main dependent: CPI inflation Main independent: De jure central bank independence (Garriga 2016
ISEAS Publishing eBooks, Dec 31, 2003
bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su r... more bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su re A ut ho riz ed Produced by the Research Support Team
Some rights reserved 1 2 3 4 16 15 14 This work is a product of the staff of The World Bank with ... more Some rights reserved 1 2 3 4 16 15 14 This work is a product of the staff of The World Bank with external contributions. Note that The World Bank does not necessarily own each component of the content included in the work. The World Bank therefore does not warrant that the use of the content contained in the work will not infringe on the rights of third parties. The risk of claims resulting from such infringement rests solely with you. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.
European Journal of Political Economy, Dec 1, 2020
It is well-recognized that fiscal spending in developing countries tend to display significant pr... more It is well-recognized that fiscal spending in developing countries tend to display significant procyclicality (increased spending during expansions and vice versa), in contravention of rational stabilization policy. Theoretical explanations have relied on either financial access or political-economic factors to justify this phenomenon. In this paper, we model the fiscal-output relationship as a dcc-garch process, and inquire whether debt or political economy constraints play a comparatively more important role in conditioning this correlation. Our evidence favors a positive effect from political economy, with weaker and more mixed results pertaining to financial access. Somewhat surprisingly, we also find that politics-induced procyclicality appears to be driven by advanced economies, and fiscal rules exacerbate procyclical tendencies.
Public Choice, 2020
Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Liter... more Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature Central bank governors and their independence What do these three besuited individuals have in common? (Other than the obvious fact that they are all men with slightly pained looks on their faces) Lim Central Bank Independence 2/30 Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature Central bank governors and their independence What do these three besuited individuals have in common? (Other than the obvious fact that they are all men with slightly pained looks on their faces) Lim Central Bank Independence 3/30 Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature The importance of central bank independence in theory and practice Central bank independence is the lynchpin of academic belief in credible monetary policymaking This argument is the hallmark of economists' pushback against recent threats to central bank governance It has also been almost unambiguously been embraced by governments worldwide Independent monetary authorities also represent an inherent tension in democracies They outsource a powerful policy instrument to unelected bureaucrats But a transparent monetary commitment also complements democratic transparency Lim Central Bank Independence They outsource a powerful policy instrument to unelected bureaucrats But a transparent monetary commitment also complements democratic transparency Lim Central Bank Independence Multiple veto players in democracies can affect the effectiveness of central bank independence and its inflationary stance (Keefer & Stasavage 2002, 2003) Independence is a transparent monetary commitment that can reinforce the transparency of democratic systems to produce low-inflation outcomes (Broz 2002) Democracies that emphasize rule of law while allowing independent central banking offer the discipline and credibility necessary for low inflation (Bodea & Hicks 2015) Lim Central Bank Independence Relying on interactions misses the way democracies decentralize societal decisionmaking Decentralized policymaking applies to monetary policy too Democracies exhibit an average independence score of 1.7 versus 1.5 for nondemocracies Democracy positively correlated with independence Recognizing this relationship (and the absence of one with respect to inflation) unlocks the relevance of democracy as an instrument for independence Lim Central Bank Independence 5/30 Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature Exploiting the explanatory power of democracy to isolate independence effect Relying on interactions misses the way democracies decentralize societal decisionmaking Decentralized policymaking applies to monetary policy too Democracies exhibit an average independence score of 1.7 versus 1.5 for nondemocracies Democracy positively correlated with independence Recognizing this relationship (and the absence of one with respect to inflation) unlocks the relevance of democracy as an instrument for independence Lim Central Bank Independence Expanded spatial-temporal coverage necessitates extra attention to parameter heterogeneity alongside endogeneity Lim Central Bank Independence Subsamples by income level Decompose central bank independence Clarify transmission channels via interaction effects Variability of inflation Lim Central Bank Independence Subsamples by income level Decompose central bank independence Clarify transmission channels via interaction effects Variability of inflation Lim Central Bank Independence Inflation Democracy Source: Author's calculations, from World Bank (2018) and Marshall, Gurr & Jaggers (2015) Lim Central Bank Independence Implication: Clear endogeneity problem that has to be resolved for appropriate inference (Brumm 2011; Crowe & Meade 2008) Lim Central Bank Independence Implication: Clear endogeneity problem that has to be resolved for appropriate inference (Brumm 2011; Crowe & Meade 2008) Lim Central Bank Independence Panel specification includes either fixed effects or multifactor error structure to absorb additional unobserved heterogeneity Robustness check includes level of development as additional control in first stage (higher per capita incomes operate through wide range of channels) Lim Central Bank Independence World Development Indicators International Financial Statistics World Bank Commodity Database Main dependent: CPI inflation Main independent: De jure central bank independence (Garriga 2016
European Journal of Political Economy, 2020
It is well-recognized that fiscal spending in developing countries tend to display significant pr... more It is well-recognized that fiscal spending in developing countries tend to display significant procyclicality (increased spending during expansions and vice versa), in contravention of rational stabilization policy. Theoretical explanations have relied on either financial access or political-economic factors to justify this phenomenon. In this paper, we model the fiscal-output relationship as a dcc-garch process, and inquire whether debt or political economy constraints play a comparatively more important role in conditioning this correlation. Our evidence favors a positive effect from political economy, with weaker and more mixed results pertaining to financial access. Somewhat surprisingly, we also find that politics-induced procyclicality appears to be driven by advanced economies, and fiscal rules exacerbate procyclical tendencies.
Journal of International Money and Finance, Nov 1, 2016
A.1. Additional tables Table A.1: Timeline and magnitude of quantitative easing operations in the... more A.1. Additional tables Table A.1: Timeline and magnitude of quantitative easing operations in the US, UK, Euro Area, and Japan, and coding scheme Episode Coding Description QE1 2009Q1-2010Q3 Major purchases by the US Fed of mortgage-backed securities and other "toxic assets" in the early stages of the crisis beginning in late 2008. By March 2009, the Fed had announced intentions to purchase financial assets totaling nearly 1.7trillion.QE22010Q4−2011Q2AprogramofFedpurchasesofUSTreasurysecuritiesinthesecondhalfof2010,withannouncedpurchasesof1.7 trillion. QE2 2010Q4-2011Q2 A program of Fed purchases of US Treasury securities in the second half of 2010, with announced purchases of 1.7trillion.QE22010Q4−2011Q2AprogramofFedpurchasesofUSTreasurysecuritiesinthesecondhalfof2010,withannouncedpurchasesof600 billion. QE3 *
RePEc: Research Papers in Economics, 2021
Info, Oct 1, 2002
The Information Economy has captured the imagination of all levels of society. Yet very often, an... more The Information Economy has captured the imagination of all levels of society. Yet very often, analyses tend to reflect personal biases or propose incredulous scenarios. This essay does not seek to rewrite old rules for a new economy; rather, it seeks to provide a balanced perspective on opportunities and challenges facing East Asia, using a multidisciplinary approach. It finds that although these countries differ in their levels of development in the Information Economy, their prospects of growth depend on the policies that they choose to pursue. Deliberations on economic issues (such as the potential for productivity gains from ICT), political concerns (including the need to cope with changing government-people dynamics), and social changes (such as the diminution of local cultures and the widening digital divide) often involve both costs as well as benefits. The optimal balance is likely to differ between countries, with no clear model answers.
Journal of Banking and Finance, Jun 1, 2019
A.1. Theoretical models of total debt and growth This annex section formally sketches out several... more A.1. Theoretical models of total debt and growth This annex section formally sketches out several channels by which aggregate debt can affect growth dynamics. First, consider a standard Ramsey-Cass-Koopman setting, with perfect foresight. The decentralized economy is comprised of firms, households, and government. The production side is populated by identical, perfectly-competitive firms that rely on labor N and capital K as inputs for production, using labor-augmenting technology A, represented in intensive form at a given time s by y s = f (k s) , (A.1) where y ≡ Y /AN and k ≡ K/AN are output and capital per efficiency unit of labor, respectively, and (A.1) is assumed to be strictly increasing and concave, and satisfy the Inada conditions f (0) = 0, f (0) = ∞, and f (∞) = 0. To ensure interior solutions of interest, we also let k t > 0. Labor and technology grow at constant rates, according toṄ /N = ν andȦ/A = φ (where the dot above a variable indicates its time derivative). Given the competitive environment, firms take wages w and the rental rate r as given, and a representative firm thus solves the program max ks f (k s) − w s − r s k s ∀s. The first order condition for this problem equates the marginal product of capital to the rental rate f (k s) = r s , and with the zero profit condition in equilibrium, Euler's Theorem implies that output is f (k s) = w s + r s k s. The consumption side is composed of a continuum of homogenous, infinitely-lived households, each endowed with a unit of labor that is supplied inelastically in exchange for wages, and providing capital inelastially as a result of past decisions. Households maximize lifetime utility, which is represented by the discounted sum of instantaneous felicities: ∞ s=t exp [−ρ (s − t)] u (c s) ds, (A.2) where c ≡ C/AN is per-effective worker consumption, and ρ is the household's subjective discount factor. The felicity function in (A.2) is assumed to be strictly increasing and concave, and satisfy the conditions u (0) = ∞, and u (∞) = 0. Households face a dynamic budget constraint where assets a are accumulated viaȧ s = (r s − ν s) a s (τ s) + w s + z s − c s ∀s, (A.3) where current assets are potentially subject to taxation τ , and households may receive a transfer z s from the government. Assets (wealth) are equal to capital k and government bond d holdings,
The World Bank eBooks, Aug 23, 2010
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
Review of Development Economics, Apr 13, 2016
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
Journal of Southeast Asian economies, 2001
World Bank, Washington, DC eBooks, Mar 1, 2019
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
World Bank policy research working paper, Sep 1, 2011
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
Routledge eBooks, Jul 6, 2022
Economics of Transition, Mar 19, 2012
The Policy Research Working Paper Series disseminates the findings of work in progress to encoura... more The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
Public Choice, Jan 2, 2020
Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Liter... more Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature Central bank governors and their independence What do these three besuited individuals have in common? (Other than the obvious fact that they are all men with slightly pained looks on their faces) Lim Central Bank Independence 2/30 Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature Central bank governors and their independence What do these three besuited individuals have in common? (Other than the obvious fact that they are all men with slightly pained looks on their faces) Lim Central Bank Independence 3/30 Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature The importance of central bank independence in theory and practice Central bank independence is the lynchpin of academic belief in credible monetary policymaking This argument is the hallmark of economists' pushback against recent threats to central bank governance It has also been almost unambiguously been embraced by governments worldwide Independent monetary authorities also represent an inherent tension in democracies They outsource a powerful policy instrument to unelected bureaucrats But a transparent monetary commitment also complements democratic transparency Lim Central Bank Independence They outsource a powerful policy instrument to unelected bureaucrats But a transparent monetary commitment also complements democratic transparency Lim Central Bank Independence Multiple veto players in democracies can affect the effectiveness of central bank independence and its inflationary stance (Keefer & Stasavage 2002, 2003) Independence is a transparent monetary commitment that can reinforce the transparency of democratic systems to produce low-inflation outcomes (Broz 2002) Democracies that emphasize rule of law while allowing independent central banking offer the discipline and credibility necessary for low inflation (Bodea & Hicks 2015) Lim Central Bank Independence Relying on interactions misses the way democracies decentralize societal decisionmaking Decentralized policymaking applies to monetary policy too Democracies exhibit an average independence score of 1.7 versus 1.5 for nondemocracies Democracy positively correlated with independence Recognizing this relationship (and the absence of one with respect to inflation) unlocks the relevance of democracy as an instrument for independence Lim Central Bank Independence 5/30 Introduction History Empirics Results Conclusion Motivation Contribution Objective Relevant Literature Exploiting the explanatory power of democracy to isolate independence effect Relying on interactions misses the way democracies decentralize societal decisionmaking Decentralized policymaking applies to monetary policy too Democracies exhibit an average independence score of 1.7 versus 1.5 for nondemocracies Democracy positively correlated with independence Recognizing this relationship (and the absence of one with respect to inflation) unlocks the relevance of democracy as an instrument for independence Lim Central Bank Independence Expanded spatial-temporal coverage necessitates extra attention to parameter heterogeneity alongside endogeneity Lim Central Bank Independence Subsamples by income level Decompose central bank independence Clarify transmission channels via interaction effects Variability of inflation Lim Central Bank Independence Subsamples by income level Decompose central bank independence Clarify transmission channels via interaction effects Variability of inflation Lim Central Bank Independence Inflation Democracy Source: Author's calculations, from World Bank (2018) and Marshall, Gurr & Jaggers (2015) Lim Central Bank Independence Implication: Clear endogeneity problem that has to be resolved for appropriate inference (Brumm 2011; Crowe & Meade 2008) Lim Central Bank Independence Implication: Clear endogeneity problem that has to be resolved for appropriate inference (Brumm 2011; Crowe & Meade 2008) Lim Central Bank Independence Panel specification includes either fixed effects or multifactor error structure to absorb additional unobserved heterogeneity Robustness check includes level of development as additional control in first stage (higher per capita incomes operate through wide range of channels) Lim Central Bank Independence World Development Indicators International Financial Statistics World Bank Commodity Database Main dependent: CPI inflation Main independent: De jure central bank independence (Garriga 2016
ISEAS Publishing eBooks, Dec 31, 2003
bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su r... more bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su re A ut ho riz ed Pu bl ic Di sc lo su re A ut ho riz ed Produced by the Research Support Team
Some rights reserved 1 2 3 4 16 15 14 This work is a product of the staff of The World Bank with ... more Some rights reserved 1 2 3 4 16 15 14 This work is a product of the staff of The World Bank with external contributions. Note that The World Bank does not necessarily own each component of the content included in the work. The World Bank therefore does not warrant that the use of the content contained in the work will not infringe on the rights of third parties. The risk of claims resulting from such infringement rests solely with you. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.
European Journal of Political Economy, Dec 1, 2020
It is well-recognized that fiscal spending in developing countries tend to display significant pr... more It is well-recognized that fiscal spending in developing countries tend to display significant procyclicality (increased spending during expansions and vice versa), in contravention of rational stabilization policy. Theoretical explanations have relied on either financial access or political-economic factors to justify this phenomenon. In this paper, we model the fiscal-output relationship as a dcc-garch process, and inquire whether debt or political economy constraints play a comparatively more important role in conditioning this correlation. Our evidence favors a positive effect from political economy, with weaker and more mixed results pertaining to financial access. Somewhat surprisingly, we also find that politics-induced procyclicality appears to be driven by advanced economies, and fiscal rules exacerbate procyclical tendencies.