Authors:Alexandra Ferreira Lopes and Tiago Neves Sequeira
In this work, we assess the existence of an S-Curve pattern in 10 Central and Eastern European countries (CEEC-10) for the relation between the trade balance and the terms of trade. Empirical results support the existence of this curve for Slovenia and Hungary. In the case of Bulgaria, the Czech Republic, and Slovakia the pattern is weaker, but it still prevails, as is the case for an aggregate of the 10 transition countries. We then document this property of business cycles in the dynamic general equilibrium trade model of Backus et al. (1994), calibrated specifically to match the CEEC-10 aggregate economy. Results support the existence of an S-Curve, except when technology shocks are absent and domestic and imported goods are perfect substitutes. Since technological shocks are determinant in explaining the S-Curve pattern and transition countries seem to be experiencing some type of technological shocks, it is not likely that this pattern will fade away in the near future and hence it is important for economic policy to be aware of this phenomenon and its consequences for these countries in terms of real convergence and the timing of euro adoption.
Authors:José Augusto Lopes Da Veiga, Alexandra Ferreira-Lopes, Tiago Neves Sequeira, and Marcelo Serra Santos
In this paper we analyse the role of the traditional determinants of economic growth in the African countries in the period between 1950 and 2012. Due to the specificity and the single nature of each one of these countries, methods that take into account observed and unobserved heterogeneity are used. Results highlight the relevance of the growth rate of the capital stock to growth in the short-run, which is significant in all regressions. The growth rate of the government to GDP ratio is also important in all but one of the regressions in which it appears, and its growth is harmful for the growth of GDP per capita in the short-run. The variables related to public debt do not present any relationship with economic growth. Human capital has a positive relationship with economic growth in regressions that do not include public debt. The growth rate of real GDP per capita also depends (negatively) on its past value, i.e., the lower the real GDP per capita the higher will be its growth rate.