1 / 11

Growth and Volatility in EU Regions: Does Space Matter?

Growth and Volatility in EU Regions: Does Space Matter?. Author : Vicente Rios Universidad Pública de Navarra. OUTLINE. Scientific Problem Theoretical Framework Quantitative Analaysis Contribution. 1. The Scientific Problem.

prentice
Download Presentation

Growth and Volatility in EU Regions: Does Space Matter?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Growth and Volatility in EU Regions: Does Space Matter? Author: Vicente Rios Universidad Pública de Navarra

  2. OUTLINE ScientificProblem Theoretical Framework QuantitativeAnalaysis Contribution

  3. 1. TheScientificProblem Whatistherelationshipbetweenvolatility and growth in Europeanregions? Empirical studies in this topic at the regional level: i) are few ii) do not account for unobserved spatial heterogeneity iii) reach diverging conclusions Focus: i) Re-Examine the relationship between volatility and growth (spatial panel) ii) Explore the role played by spatial spillovers and interdependences

  4. 2. Theoretical Framework There are many reasons to believe that: i) volatility and growth are connected Positively: Schumpeter (1939); Mirman (1971), Black (1987); Bean (1990); Hall, (1991); Saint-Paul (1993); Helpman and Trajtenberg(1998), Negatively: Pindyck (1982);Bernanke(1983) Ambiguously: De Hek (1999), (2002); Blackburn and Galindev (2003); Manuelli and Jones (2005); Galindev (2007) ii) space might be a channel of difussion(with some frictions) Spatially Augmented Growth Models: López-Bazo et. al (2004), Erturand Koch (2007), M. Fisher (2009) iii) Work in progress  derive a SDM equation from • stochastic endogenous growth model with • spatial diffussion, iid productivity shocks, CES function

  5. 3. QuantitativeAnalysis Sample: 198 NUTS 2 Regions (EU 13+ Norway + Switzerland) Time:1980-2010 Model Y: GDP pc growth rate Key variable: Volatility (Std GDP pc growth rate) Controls: Investment, Initial GDP pc, Industry Mix, Pop, Agglomeration Methodology • Estimation and Selection of Spatial Panel Data • Simulation: Internal to region + Neighbor’s volatility effect • Robustness Analysis

  6. 3. QuantitativeAnalysis MixedApproach: recommendedbyElhorst(2010) - Estimate non spatialmodels • Use RobustLagrandeMultiplierTeststocheckthespatialdependenceform (Spatial Error, SpatialLag). • W Matrix: distancematrix, exogeneity Result 1: Rejectthenull of no spatialdependence in all cases Result 2: Time Effects are jointlysignificant (notshown)

  7. Result 3: SpatialDurbinbest describes the data

  8. 3. QuantitativeAnalysis CheckifSpatialDurbin can be simplifiedtoSpatialLagorSpatial Error versions ModelSelectionTests Result 4: SelectedModelisSpatialDurbin

  9. 3. QuantitativeAnalysis Key Result 1: Volatility and Growth are positivelyrelated Key Resul 2: Spatialspilloversaccountforhalf of theimpact

  10. 3. QuantitativeAnalysis: Robustness Results are robusttodifferentW’s

  11. 4. Contributions Europeanregionswithhighvolatilitytendtogrowfaster Spatialspillovers are a key factor reinforcingtheeffect of internalvolatilityongrowth Theresultisrobusttospatialweightmatrixes Expected (Link Theory-EmpiricalModel)

More Related