Regime-switching effects of debt on real GDP per capita the case of Latin American and Caribbean countries

Chang, Tsangyao; Chiang, Gengnan

doi:10.1016/j.econmod.2011.06.020

Cited by 17 publications

(8 citation statements)

References 6 publications

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“…The estimations of panel fixed-effects model and panel threshold regression model first require that all variables are stationary to avoid generating the 'spurious regression'. The first-generation panel unit root tests (e.g., ADF, LLC, IPS, and PP) are performed to test the stationarity of variables under the assumption that the individual time series in the panel are cross-sectionally independent [101]. If the individual time series in the panel are cross-sectionally, dependently distributed due to the common factors, the results using the first-generation panel unit root tests will cause distortion [102].…”

Section: Resultsmentioning

confidence: 99%

Threshold Effect of Tourism Development on Economic Growth Following a Disaster Shock: Evidence from the Wenchuan Earthquake, P.R. China

Zhang

2019

Sustainability

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To examine whether tourism can effectively stimulate economic growth following a disaster shock, we apply a panel threshold regression technique to test the threshold effect of tourism development on economic growth of the 36 Wenchuan earthquake-affected counties in 2008-2016. The empirical results using the panel fixed-effects model show that tourism significantly contributes to economic growth, supporting the validity of the tourism-led growth hypothesis (TLGH) for the disaster-affected destinations. The results of the panel threshold regression model also indicate a threshold effect of tourism development on economic growth, implying that counties with different conditions of tourism specialization and industrial structure experience different impacts on the tourism-growth nexus. Specifically, the estimated coefficients of tourism on economic growth decrease with the levels of tourism specialization and industrial structure exceeding the threshold value. Based on the Tourism Area Life Cycle theory (TALC), we further divide the 36 disaster-stricken counties into six types based on the evolution of tourism specialization: Exploration-stage type, involvement-stage type, transition-stage type, development-stage type, consolidation-stage type, and stagnation-stage type. The empirical findings and managerial implications discussed are generally applicable to policymakers seeking new ways to invigorate the economy in other disaster-affected destinations.Note: Notice of the State Council of China on printing and distributing the general plan for recovery and reconstruction after the Wenchuan Earthquake announced the 39 disaster-stricken counties of the Sichuan province that were seriously affected by the Wenchuan earthquake. They include:

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Section: Resultsmentioning

confidence: 99%

Threshold Effect of Tourism Development on Economic Growth Following a Disaster Shock: Evidence from the Wenchuan Earthquake, P.R. China

Zhang

2019

Sustainability

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“…Hansen [8] made an initial effort on introducing threshold effects, together with a panel threshold regression (PTR) model which assumes a jumping transition through different regimes. In improving the practicability, González et al [9] developed the Panel Smooth Transition Regression (PSTR) model, extending a smooth transition regression (STR) model to panel data heterogeneity across the panel members and over time [10]. The merged PSTR version of combining both STR and panel data enables the transition to switch between regimes over time as smooth as it can be.…”

Section: Introductionmentioning

confidence: 99%

Effects of the Interest Rate and Reserve Requirement Ratio on Bank Risk in China: A Panel Smooth Transition Regression Approach

Geng

Zhai²

2015

Discrete Dynamics in Nature and Society

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This paper applies the Panel Smooth Transition Regression (PSTR) model to simulate the effects of the interest rate and reserve requirement ratio on bank risk in China. The results reveal the nonlinearity embedded in the interest rate, reserve requirement ratio, and bank risk nexus. Both the interest rate and reserve requirement ratio exert a positive impact on bank risk for the low regime and a negative impact for the high regime. The interest rate performs a significant effect while the reserve requirement ratio shows an insignificant effect on bank risk on a statistical basis for both the high and low regimes.

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“…The PSTR model is the extension of a smooth transition regression (STR) modelling to panel data with heterogeneity across the panel members and over time (Chang and Chiang, 2011). It allows for hetero-geneity in the regression coefficients by assuming that coefficients are continuous functions of an observable variable through a bounded func-tion of such variable, referred to as transition function and, fluctuates between extreme regimes (González et al, 2005).…”

Section: Panel Smooth Transition Regression Modelmentioning

confidence: 99%

Non-linearities in inflation–growth nexus in the SADC region: A panel smooth transition regression approach

2013

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The main objective of central banks around the world is the achievement and maintenance of price stability, which actually creates an environment conducive for faster economic growth. Therefore, it is important for policy makers to understand the relationship between inflation and economic growth in order to make sound policies. If inflation is detrimental to economic growth, then policy makers should aim for low rates of inflation. This leads to a question; how low should the inflation rate be? Previous research in the non-linearities of the inflation-growth relationship has found that a positive relationship exists when the in-flation rate is low and a negative relationship when the inflation rate is high. This implies the existence of a threshold level of inflation at which the sign switches. In this paper we use panel data for the period 1980-2008 to examine the inflation-growth nexus in the Southern African Development Community (SADC) re-gion and to endogenously determine the threshold level of inflation. To deal with problems of endogeneity and heterogeneity, the paper uses the Panel Smooth Transition Regression (PSTR) method developed by González et al. (2005) to examine the non-linearities in the inflation-growth nexus. This technique further estimates the smoothness of the transition from a low inflation to a high inflation regime. The findings reveal a threshold level of 18.9%, above which inflation is detrimental to economic growth in the SADC region.

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Regime-switching effects of debt on real GDP per capita the case of Latin American and Caribbean countries

Cited by 17 publications

References 6 publications

Threshold Effect of Tourism Development on Economic Growth Following a Disaster Shock: Evidence from the Wenchuan Earthquake, P.R. China

Threshold Effect of Tourism Development on Economic Growth Following a Disaster Shock: Evidence from the Wenchuan Earthquake, P.R. China

Effects of the Interest Rate and Reserve Requirement Ratio on Bank Risk in China: A Panel Smooth Transition Regression Approach

Non-linearities in inflation–growth nexus in the SADC region: A panel smooth transition regression approach

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