1. Rizk, R. and Slimane, M.B. (2018)*.Modelling the relationship between poverty, environment, and institutions: a panel data study. Environmental Science and Pollution Research 25: 31459
Abstract: The paper examines the relationship between poverty and CO2 emission. We contribute by using a global panel data of 146 countries over the period 1996-2014 and by focusing on the role of institution in poverty and environmental degradation nexus. The main findings are that the non-linearity relationship between poverty and CO2 emission could prompt a further increase in the poverty and environmental degradation. However, an increase in the institutional quality leads to a reduction in poverty and more protection to the environment. The main policy recommendation is that all countries need to improve their institutional framework so that reduction of poverty and environmental degradation can occur.
JEL Code: O13; Q53; Q56; C33
Keywords: Poverty; CO2; Institution quality; Panel data
Authors and affiliations: Reham Rizk (British University in Egypt (BUE), Egypt) and Mehdi Ben Slimane (WTO Chair, Tunis Business School, University of Tunis, Tunisia)
2. Shahbaz, M., Kraeif, N., Mahalik, M.K. and Khan, S. (2018)*. Are Fluctuations in Military Spending Transitory or Permanent? International Evidence, Economics Bulletin 38(2): 1198-1212.
Abstract: All preceding studies that investigates the consequences of “defense news” shocks (like war on terrorism) on military spending assumed a permanent deviation from its growth path. This paper reverses this finding by employing more powerful panel unit root tests that accounts for both cross-sectional dependence across countries and structural breaks on military spending series of more than 100 countries over 1988 – 2012; based on the definitions of income levels suggested by the World Bank â€“ high, middle and low. We find robust evidence supporting the stationarity of military spending for all the panels (full, high, middle and low income countries) which reverses the results of past works that failed to reject non-stationarity in the data. These findings reveal that any exogenous shock to military spending has a temporary effect for high, middle and low income countries, meaning that military spending will return to its time trend. The stationary characteristic of military spending is fundamental for forecasting defence budget in response to exogenous shocks (terrorism and military conflicts).
Affiliation of authors: Shahbaz, M. (Montpellier Business School, France), Kraeif, N. (WTO Chair, Tunis Business School, University of Tunis, Tunisia), Mahalik, M.K. (Indian Institute of Technology, India) and Khan, S.(Minnesota State University, USA).
3. Kraeif, N., Shahbaz, M., Mallick, H. and Loganathan, N. (2018)*. Estimation of electricity demand function for Algeria: Revisit of time series analysis, Renewable and Sustainable Energy Reviews 82 (3): 4221-4234.
Abstract: This paper aims to empirically re-examine whether economic growth has effect on electricity consumption for Algerian economy. We have incorporated urbanization and trade openness in electricity demand function as additional determinants of electricity consumption for the period of 1971–2012. For empirical purpose, we have applied the recently developed combined cointegration test proposed by Bayer and Hanck (2013) and bounds testing approach to cointegration by Pesaran et al. (2001) for establishing the cointegration between the variables by accommodating structural breaks. The results expose that income growth leads to higher electricity demand along with urbanization being another major contributing factor of rising electricity demand. In contrast, trade openness leads to reduce electricity demand. The causal association between the variables is further examined with the application of innovation accounting approach of Vector Autoregressive (VAR). The empirical evidence indicates the presence of the neutral effect between income growth and electricity use. Urbanization causes electricity use and electricity use causes urbanization in Granger sense.
Keywords: Electricity; Growth; Urbanization; Trade openness
Affiliation of authors: Kraeif, N. (WTO Chair, Tunis Business School, University of Tunis, Tunisia); Shahbaz, M. (Montpellier Business School, France), Mallick, H. (Centre for Development Studies (CDS), India) and Loganathan, N. (Faculty of Management Universiti Teknologi, Malaysia).
4. Kraeif, N., Shahbaz, M., Heshmati, A. and Azam, M. (2018)*. Are unemployment rates in OECD countries stationary? Evidence from univariate and panel unit root tests, The North American Journal of Economics and Finance, In Press.
Abstract: This paper revisits the dynamics of unemployment rate for 29 OECD countries over the period of 1980–2013. Numerous empirical studies of the dynamics of unemployment rate are carried out within a linear framework. However, unemployment rate can show nonlinear behaviour as a result of business cycles or some idiosyncratic factors specific to labour market (Cancelo, 2007). Thus, as a testing strategy, we first perform Harvey, Leybourne, and Xiao (2008) linearity unit root test and then apply the newly ESTAR nonlinear unit root test suggested by Kruse (2011). This test has higher power than conventional unit root tests when time series exhibits nonlinear behaviour. Our empirical findings provide significant evidence in favour of unemployment rate stationarity for 25 countries. For robustness purpose, we have also used panel unit root tests without and with structural breaks. The empirical results show that unemployment hysteresis hypothesis is strongly rejected, when taking into account the cross-sectional and structural break assumptions. Thus, unemployment rate is expected to return back to their natural levels without executing any costly macroeconomic labour market policies by the OECD’s governments.
Jel Code: C23; E24; J48; J64; N30
Keywords: Unemployment; Unit root; Labour market policy; OECD
Affiliation of authors: Kraeif, N. (WTO Chair, Tunis Business School, University of Tunis, Tunisia); Shahbaz, M. (Montpellier Business School, France), Heshmati, A. (Department of Economics, Sogang University, South Korea) and Azam, M. (Department of Economics, Faculty of Business and Economics, Abdul Wali Khan University Mardan, Pakistan).
5. Jouini, N., Lustig N., Moummi, A. and Shimeles, A. (2018)*. Fiscal Policy, Income Redistribution, and Poverty Reduction: Evidence from Tunisia, The Review of Income and Wealth, 4 (s1):S225-S248.
Abstract: This paper estimates the impact of Tunisia’s tax and transfer system on inequality and poverty and assesses the benefits from public spending on education and health. Results show that Tunisia’s redistributive fiscal policy reduces inequality and extreme poverty significantly. However, based on the national poverty line, the headcount ratio increases, implying that a large number of the poor people pay more in taxes than they receive in cash transfers and subsidies. This is due to a relatively high burden of personal income taxes and social security contributions for low‐income households.
Jel Code: D31; H22; I38
Keywords: Benefit incidence; inequality; poverty; social spending; Tunisia
Affiliation of authors: Jouini, N. (Doha Institute for Graduate Studies, Qatar); Lustig N. (CEQ Institute, Tulane University; Center for Global Development; Inter‐American Dialogue); Moummi, A. (United Nations Economic and Social Commission for Western Asia); Shimeles, A. (Development Research Division, African Development Bank).
* This work is an output of WCP-TBS fellows not directly linked or funded by the Chair
* Influenced but not attributed to WCP-TBS