Conference Abstracts

Using International Energy Agency Data to Calculate the Environmental Impact of Connecting Maritime Ships to Shoreside Power
Dr William Hall, Coventry University

Maritime shipping is becoming increasingly recognised as an important source of the main greenhouse gas, CO2. The atmospheric emissions from ships are of particular concern when vessels are at berth, because they consume significant quantities of electrical power which is generated by inefficient onboard diesel engines leading to unnecessary emissions of greenhouse gasses. One alternative to using onboard power generation is to connect ships to an onshore electrical supply; this is referred to as shoreside power or cold-ironing. In this paper, we have investigated the impact that shoreside power would have on the CO2 emissions from ships at berth if the electrical power was drawn from national electricity grids. We have used International Energy Agency databases on electrical supply and atmospheric emissions to calculate the mass of CO2 which would be emitted if ships were to draw electrical power from national electricity grids and compared the results to the existing emissions from ships at berth reported in the literature. We have found that in the majority of major maritime nations, the use of shoreside power drawn from national electricity grids would lead to a significant reduction in CO2 emissions, most notably in Japan, UK, and Italy. In the US, small reductions in CO2 emissions could be achieved while in China shoreside power would lead to a 38% increase in CO2 emissions. We have demonstrated our findings using three case studies.

Intergenerational Transmission of Inflation Aversion: Theory and Evidence
Dr Alexander Mihailov, University of Reading

We study the evolution of inflation aversion preferences across generations. In the theoretical part of the paper, we analyze the dynamics of such preferences in an overlapping-generations model with heterogenous mature agents characterized by different degrees of inflation aversion. We show how the stability of a society’s degree of inflation aversion depends on the strength and speed of changes in the structure of the population. The empirical part then proposes two applications in support of the theoretical results. We first link demographic structures to inflation aversion, and then proceed by looking at the relations between income (in)equality and measures of inflation aversion.

Empirical Investigation of Monetary Models of GBP/USD Exchange Rate in Cointegrating VAR framework with Exogenous I(1) and Structural Break
Viet Hoang Nguyen,Leeds University Business School

The macro-modeling of exchange rates has been one of the most challenging research areas in economics over the last thirty years with the prevailing failure of macro-fundamentals to forecast exchange rates. Under the cointegrating VAR framework with exogenous I(1) variable initiated by Pesaran et al (2000), Pesaran and Shin (2002), we examine popular monetary models of GBP/USD bilateral exchange rate, most notably the sticky-price model which incorporates current account balances (Hooper-Morton). The GBP/USD bilateral exchange rate will be analysed from the UK’s perspective within the system of core macroeconomic variables of the UK and US’s economies in the period from 1980Q1 to 2006Q4. In particular, we explicitly allow for the presence of structural break in the model, considering the Black-Wednesday event as a change in monetary policy regime of the UK. This econometric framework allows us to: firstly analyse the theory-predicted long-term relationship between exchange rate and macro-fundamentals, secondly examine the impulse response functions with respect to various shocks of interest, and finally provide a broad picture of exchange rate forecasting based on various in- and out-of-sample forecasting techniques using parametric simulation.

The Formation and Evolution of Childhood Skill Acquisition: Evidence from India
Christian Helmers, University of Oxford and Manasa Patnam, University of Cambridge

Building on recent advances in the literature and using a rich data set for two cohorts of children aged between one and twelve for Andhra Pradesh, India, we investigate the determinants of children's cognitive as well as non-cognitive skills. We find evidence of self-productivity for cognitive skills and cross-productivity effects from cognitive on non-cognitive skills. Moreover, we demonstrate that parental investment has contemporaneously powerful positive effects on skill levels for all age groups. Investigating other determinants of these skills, we find child health at age one to influence cognitive abilities at age five; whereas child health at age one is influenced by parental care already during pregnancy and earliest childhood. Understanding these determinants accounting explicitly for the effect of a large number of child, caregiver and household characteristics provides insights with regard to possible policy interventions improving chances of children in poor environments to develop cognitive and non-cognitive skills crucial for success in many spheres of life.

Poster Abstracts

Skilled Migration and Human Capital Formation in Developing Countries
Syed Bokhari, University of Nottingham (Note added 27th November: unable to attend)

This paper investigates the difference in responsiveness of the emigration rates of secondary and tertiary educated workers to an increase in human capital in developing countries. The primary explanatory variable of interest is the 'proportion of post secondary educated natives' as it represents an increase in native human capital. An increase in this variable may, in a way, reflect increased efforts by the governments to prevent potentially skilled migrants from migrating. An example of such an effort is public investment in education. This paper addresses the question: Are the emigration rates of tertiary educated workers more responsive to human capital formation in their country of origin than the emigration rates of the secondary educated.

Exchange Rate Volatility and Trade Flows in Pakistan: Evidence from Co-integration and Error Correction Model
Dr. Imran Sharif Chaudhry, Bahauddin Zakariya University and London School of Economics and Political Science

This paper evaluates the impact of exchange rate and its volatility on trade flows in Pakistan using co-integration and error-correction modeling techniques of time series econometrics based on ESDS international datasets. The results indicate that, the impact of real exchange rate and its volatility on real exports, real imports and trade openness is significant. These results also support the existence of a short run as well as long run relationship between  exchange rate and its volatility and real exports, real imports, trade balance and trade openness.

Puzzles in financial development and economic growth
Binam Raj Ghimire

This paper aims to contribute to the literature of financial development and economic growth by providing further empirical support to two puzzles. One is related to the positive impact of stock market development upon economic growth in sample inclusive of developing and emerging markets. The other puzzle relates to a positive and significant impact of private credit upon economic growth in the long-run but a negative and insignificant impact in the short-run.

The puzzles are documented in a number of recent papers (Atje and Jovanovic 1993; Beck & Levine, 2004; Favara, 2003; Loayza & Ranciere, 2006; Saci et al., 2008).

The paper uses panel data in a broad sample of countries and applies two stage/ GMM techniques wherein we also explain on the puzzles and lay the foundations for further research on the possible causes.

Mick Jagger's Arithmetics: Can I get satisfaction from satisfactions?
What we can learn from subjective satisfactions for well-being design.
Vincent Marcus, INSEE

The main synthetic indexes of so-called "well-being" are built-in providing implicit answers to the following questions : what measurable variables should be included for a good accounting of well-being? What are the relative importance of those in the aggregate? In this paper, we provide empirical investigations on the subjective counterpart of such questions based on individual data on satisfaction from the European Quality of Life Survey 2003. This survey provides data related to overall satisfaction and satisfaction along several items (income, job, health, personal relations...). Thus, we are able to identify what domains really matter in the overall satisfaction and how important they are. Controlling for unobserved individual effects is possible thanks to additional questions revealing personal characteristics

Patterns of pro-poor Growth and its determinants: Empirical illustration from Individual countries
Julius Olaogun, London Metropolitan University

The interaction between poverty, growth and inequality remains one of the most controversial issues in development economics. In fighting poverty, economic growth is considered the most powerful instrument for reducing poverty; however, it has also been argued that high economic growth may increases poverty (Kakwani and Pernia 2002). This point of argument has increased the growing research interest in the pro-poorness of growth. There are two definitional approaches for measuring pro-poor growth used in recent literature: relative and absolute measurements. Although intuitively appealing, these traditional measures have two operational limitations. Firstly, their results sometime conflict even from the same set of data, making empirical results seldom as useful to policy makers as one might reasonably expect. Secondly, the degrees of pro-poorness among the poor households are not clearly captured. We demonstrate these limitations using the GIC curves and proposed another measure based on Shapley poverty decomposition that captures the degrees of benefit/loss of the pattern of growth accruing to those households at the bottom of the income distribution. We apply the measure to six individual countries. Our results show the benefit/loss of growth patterns differs among the poor and between countries. We also test for the determinants of pro-poor growth.

Is Generalized Trust Influenced by Occupation of Respondent? - Exploratory Analysis
Mark Reader, University of Cambridge

Data: First European Quality of Life Survey 2003: Quality of life in Europe. European Foundation for the Improvement of Living and Working Conditions, 2004.
# q28 --- Generalised Trust: "most people can be trusted" [01-10: recoded as binary 0(<=5) or 1(>5)]
# q2 --- What is your occupation [pick from 14: 'farmer', 'shop owner', etc] n=11,917
# q8 --- What sector of the economy [pick from 18 'NACE Sectors': 'manufacturing', 'education', 'construction', 'financial intermediation', etc] =21,548

Method: Data were analysed using Ordinal Regression with SPSS. The dependant variable was 'Generalized Trust Score', and either Occupation or NACE Sector was the independent variable. Country dummies were included, as countries are known to differ widely in trust. However, no other controls were included for factors that might influence Generalised Trust.

Results: Eight Occupations significantly increased trust relative to 'other (unskilled) manual worker, servant' - in some cases with double the relative odds. 10 NACE sectors appear to significantly increase trust, compared to the 'Other sectors' category. The model fit significant with P<.000, but the Pseudo-R² was low, as is often the case with such models. Generally 'managerial', 'professional' or 'self-employed' occupations had higher trust. 'People' and 'services' sectors appear to have higher trust compared to 'manufacturing', 'construction', 'wholesale' and 'other'.

Conclusions: 'Management' and 'People' occupations or sectors seem to increase the level of trust acknowledged by respondents relative to 'Other sectors'. Interestingly both 'managers' and 'self-employed professionals' show higher levels of trust, and one might hypothesize that their experience would lead them to have a more realistic view. The results agree in principle with J. Delhey and K. Newton (2003: Eur. Socs.), who state that "those who are successful in life trust more, or are more inclined by their personal experience to do so.". Further analysis might be undertaken using appropriate controls for factors likely to influence trust.

Financial Liberalization and Economic Growth: Do Prudential Regulation and Supervision matter?
Anoshirvan Taghipour, University of Essex

Since the late 1970s many countries have started to liberalize financial system so as to enhance economic growth. However, events following the implementation of financial reforms in some countries did not provide much support to the theoretical promises of the liberalization thesis. In fact, some countries witnessed dramatic crises which were followed by painful economic downturns (Diaz, 1985).

Some researchers have tried to investigate why financial liberalization policy has different effect on growth in various countries. For example, Hellmann et al. (2000) investigate the role of capital requirements and deposit rate regulations. Among others, McKinnon (1991) emphasize the sequencing of economic reform while Levine et al. (2000) and Bekaert et al (2005) focus on the role of governance and legal factors.
In this paper, we investigate empirically the role of the quality of supervision on the response of growth to financial liberalization in a sample of 30 countries over the period 1973-2005 using dynamic panel approach. Our index for the quality of supervision is constructed based on Bank for International Settlement (BIS) standards so called the Basel Accord.

Our results show that financial liberalization has a positive contribution on economic growth. However, the response of growth to liberalization is different in various countries. The findings indicate that the impact of liberalization on growth is significantly greater for countries with high compliance to Basel supervisory principles and better regulations regarding investment. This result is consistent with the Repullo (2004) model where he shows that Basel supervisory principles are effective instruments in eliminating excessive risks taking by banks.

Migrant Flows in a Changing World: what can we learn from the UK?
Henry Telli, University of Nottingham

It may seem obvious that people migrate to places where they hope to find better opportunities that will improve their living conditions. However, a deeper consideration of the determinants of migrant flows reveals more complex migrant behaviours and flow patterns that require more thoughtful analysis within that framework.

In this paper we empirically explore the macroeconomic determinants of migrant flows into the UK with a special focus on the role development within the migrant sending country. We ask the following four questions: What are the impacts of economic, political, demographic, migrant networks and other country specific factors in the determination of migrant flows? Will the development and improvement of conditions in the less developed regions of the world reduce migration from these regions to the more developed regions? How far should conditions improve to affect the flow of migrants from less developed countries to developed countries? Does immigration policy matter in the determination of migrant flows?

Using data from 40 developing countries (collected through ESDS) in Africa, Asia and South America covering the period from 1973 - 2005, we test the hypothesis that there is an inverse U shape relationship between development and migration such that emigration from developing countries increase initially as they develop but latter decrease with further development after a certain threshold in the development process. We employ panel data techniques and we find that in the case of the UK, the rate of emigration from developing countries falls as they develop. The preliminary results also show that distance, political situation in the sending country, commonwealth status, language, and trade with UK are all significant determinants of migrant flows to the UK.

Home Bias in Foreign Direct Investments
Kristina Vasileva, City University

There is extensive financial literature in home bias in equity markets. Equity investors prefer local, domestic investment opportunities against foreign, further away ones. The purpose of this presentation is to show that the home bias phenomenon is present in foreign direct investments as well. The data is obtained through ESDS and is an unbalanced panel data on all 30 OECD member countries and their FDI partners for the time period of 1981 to 2005. We consider all provided data on FDI inflows and outflows, positive and negative values as well as the non investment relationship (zero FDI). Initial results show that the data supports the claim that there is home bias in FDI.

Capital Account Liberalization and Currency Crisis – The Case of Central Eastern European Countries
Malgorzata Sulimierska, University of Sussex

The dissertation investigates if Central and Eastern European countries with unregulated capital flows are more vulnerable to currency crises. In order to answer this question properly the paper considers two lines of analysis: single-country and multi-country. Single –country studies look into three cases: Russia, Poland and Latvia. The multi-country analysis is the simple adaptation of Glick, Guo and Hutchison’s probit panel model (2004). The results suggest that countries with liberalized capital accounts experience a lower likelihood of currency crises. Moreover, the information from case studies pointed that the speed and sequence of the CAL process needs to be adequate for the country development.