World Growth
description
Transcript of World Growth
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National Autonomous University of Mexico
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TRADE AND WORLD ECONOMIC GROWTH,
1970-2015
Eduardo LoraProject Link, NY City. October 22-24, 2014
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A. MOTIVATION
1. EVALUATE ECONOMIC GROWTH FORSEVERAL COUNTRIES IN THE LONG RUN.
WE ARE LIVING A SLOW PACE.
2. DEMONSTRATE THAT INTERNATIONALTRADE IS NOT THE MAIN FUEL OFECONOMIC GROWTH.
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B. CONTENTS
Economic Growth.
Some Countries and Regions.
Long run analysis.
International Trade andEconomic Growth.
Econometric Issues.
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4HP Filter with the end-of-sample correction (St.-Amant &Van Norden, 1997).
Questionable, criticismWell known filter
min =1 =1
2 +
=1
1
+1 12+
=
end-of-sample correction
METHODOLOGICAL ISSUES
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ECONOMIC GROWTH, SOME COUNTRIES
1970-2015
5
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Statistical Sources:WORLD BANK (2014)
http://databank.bancomundial.org/data/views/reports/tableview.aspx#. September, 2014
IMF (2014) WORLD ECONOMIC OUTLOOK : LEGACIES, CLOUDS, UNCERTAINTIES / Overview of the World Economic Outlook Projections
http://www.imf.org/external/pubs/ft/weo/2014/02/pdf/text.pdf , October, 2014.
WTO (2014):
http://www.wto.org/english/news_e/pres14_e/pr722_e.htm, October, 2014.11/04/2015 6
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Germany
7
-6
-4
-2
0
2
4
6
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
GDP POTENTIAL
1971 (3.4)
1990 (2.8)
2014 (1.6)
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Latin America
8
-4
-2
0
2
4
6
8
10
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
GDP POTENTIAL
1970(7.6)
1987 (2.0)
2014 (3.1)
2007 (3.6)
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Brazil
9
-5.0
-2.5
0.0
2.5
5.0
7.5
10.0
12.5
15.0
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
GDP POTENTIAL
1970 (11.7)
1991 (1.9)
2014 (2.4)2007 (3.6)
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Chile
10
-15
-10
-5
0
5
10
15
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
GDP POTENTIAL
1992 (7.5)
2014 (4.1)
1973 (1.2)
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China
Fuente: Banco Mundial (2014)Pronsticos : FMI (2014)
11
-4
0
4
8
12
16
20
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
PIB Potencial
1970 (13.1)
1977 (6.7)
2006 (10.5)
2014 (7.7)
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United States
12
-4
-2
0
2
4
6
8
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
GDP POTENTIAL
1970 (2.5)
2009 (1.5)
1997 (3.5) 2014 (2.1)
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Japan
13
-6
-4
-2
0
2
4
6
8
10
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
GDP POTENTIAL
1970 (3.3)
1985 (4.5)
2009 (0.6)
2014 (1.2)
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Mexico
14
-6
-4
-2
0
2
4
6
8
10
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
GDP POTENTIAL
1970 (6.6)
1987 (2.1) 2009 (2.3)
2014 (2.7)
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Russia
15
-15
-10
-5
0
5
10
15
90 92 94 96 98 00 02 04 06 08 10 12 14
GDP POTENTIAL
1990 (-9.2)
2004 (5.9)
2014 (1.4)
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European Union
16
-6
-4
-2
0
2
4
6
8
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
GDP POTENTIAL
1970 (4.5)
2009 (0.9)
1982 (2.1)
2014 (0.8)
1999 (2.5)
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World
17
-4
-2
0
2
4
6
8
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
GDP POTENTIAL
1970 (4.6)
1992 (2.8)
2009 (2.5)2014 (2.9)
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INTERNATIONAL TRADE
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Volume of world merchandise trade (2005=100), 1970-2012
Source: WTO (2014) 19
0
20
40
60
80
100
120
140
1970 1975 1980 1985 1990 1995 2000 2005 2010
2009 World Crisis
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Volume of World Merchandise Trade and World GDP (2005=100), 1970-2015
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0
20
40
60
80
100
120
140
160
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
GDP Trade
2009 Crisis
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Trade, 1970-2015Rate of Growth
21
-15
-10
-5
0
5
10
15
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Trade Trend
1997 (6.4)
1981 (3.2)
2014 (3.9)
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-15
-10
-5
0
5
10
15
1970 1975 1980 1985 1990 1995 2000 2005 2010
TRADE GDP
Trade Growth and Global growth1970-2015
SOURCE: WORLD BANK (2014) y WTO (2014 ) 22
1975 1982 2009
= 1.50
=4.77
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Trade Growth and Global growth, 1970-2015. HP Filter
23
2
3
4
5
6
7
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
GDP TRADE
1981 1996 2009
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ECONOMETRIC
ISSUES
24
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Unit Root Tests
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GDP GDP TRADE TRADE
TREND AND INTERCEPT
ADF -0.07* -5.38 -0.99* -7.81
PP 0.87* -5.67 -0.46 -12.46
KPSS 23.02* 3.01 22.43* 0.18
INTERCEPT
ADF 3.57* -4.29 2.22* -6.67
PP 6.79* -4.33 4.15 -6.67
KPSS 17.78* 11.11* 10.77* 4.79
NONE
ADF 12.97* -1.55* 5.44* 0.86
PP 17.65* -1.05* 9.25 -4.88
Note: * Unit Root at 95%
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GDP and TradeScatter
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4.6
4.8
5.0
5.2
5.4
5.6
5.8
6.0
2.8 3.2 3.6 4.0 4.4 4.8 5.2
LTRADE
LG
DP
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yt= 3.20 + 0.55 tradet + et(t) (nd) (-25.97)
Johansen Test (r = 1): Trace = 0.40 (0.52); Max Eigen = 0.01 (0.52)
Correct especificacion tests:Urzua = 3.33 (0.94); LM(11) = 3.60 (0.46); White N.C. = 64.54 (0.32)
r = 1; 1 common trend, max eigenvalue = 0.90
ECM: D(y) D(trade)
a -0.076 0.033
SD (0.035) (0.11)
t [-2-15] [0.30]
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Granger Causality Test (VEC)
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Variable Dependiente
D(y) D(trade)
2 Prob. 2 Prob.
D(y) 0.00 0.00 53.31 0.00
D(trade) 26.61 0.00 0.00 0.00
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Ajuste de Relacin de Cointegracin
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4.6
4.8
5.0
5.2
5.4
5.6
5.8
6.0
6.2
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
LGDP 3.202182+.5525*LTRADE
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Historical Simulation(Broyden)
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-2
-1
0
1
2
2.8
3.2
3.6
4.0
4.4
4.8
5.2
70 75 80 85 90 95 00 05 10 15
Actuals LTRADE (Scenario 1)
Deviation Percent Deviation
LTRADE
-.4
-.2
.0
.2
.4
.6
4.5
5.0
5.5
6.0
6.5
70 75 80 85 90 95 00 05 10 15
Actuals LGDP (Scenario 1)
Deviation Percent Deviation
LGDP
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Variance Decomposition
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0
10
20
30
40
50
60
70
80
90
100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
LPIB LCOMER
0
10
20
30
40
50
60
70
80
90
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
LPIB LCOMER
TRADE GDP
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Impulse-Response
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Generalizaded impulses. Bootstrap bands at 95%.
0
0.005
0.01
0.015
0.02
0.025
0.03
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
PIB a Comercio Comercio a PIB
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Thank you
3411/04/2015
Eduardo Lora
Center of Modeling and EconomicForecasting
www.economia.unam.mx/profesores/eloria/www.economia.unam.mx/cempe