This article examines how much of the dispersion in economic performance across OECD countries can be accounted for by the proximity to areas of dense economic activity. To do so, various indicators of distance to markets and transportation costs are added as determinants in an augmented Solow model, which serves as a benchmark. Measures of distance to markets are found to have a statistically significant effect on GDP per capita. And the estimated economic impact is far from negligible. The reduced access to markets relative to the OECD average could contribute negatively to GDP per capita by as much as 11% in Australia and New Zealand. Conversely, a favourable impact of around 6-7% of GDP is found in the case of two centrally-located countries: Belgium and the Netherlands. The paper provides also some tentative evidence that spending on R&D and human capital might have a stronger effect on GDP per capita in countries with a higher degree of urban concentration.
No abstract
This paper examines how much of the dispersion in economic performance across OECD countries can be accounted for by economic geography factors. More specifically, two aspects of economic geography are examined, namely the proximity to areas of dense economic activity and endowments in natural resources. To do so, various indicators of distance to markets, transportation costs, and dependence on natural resources are added as determinants in an augmented Solow model, which serves as a benchmark. Three measures of distance to markets are found to have a statistically significant effect on GDP per capita: the sum of bilateral distances, market potential and the weighted sum of market access and supplier access. And the estimated economic impact is far from negligible. The reduced access to markets relative to the OECD average could contribute negatively to GDP per capita by as much as 10% in Australia and New Zealand. Conversely, a favourable impact of around 6-7% of GDP is found in the case of two centrally-located countries: Belgium and the Netherlands. Endowments in natural resources are also found to have a significant positive effect on GDP per capita, suggesting that OECD countries have, on average, escaped the natural resource curse or severe forms of the Dutch disease. The paper provides also some tentative evidence that spending on R&D and human capital might have a stronger effect on GDP per capita in countries with a higher degree of urban concentration.
Organisation de Coopération et de Développement Économiques Organisation for Economic Cooperation and Development 17-Jun-2010 ___________________________________________________________________________________________ _____________ English-Or. English ECONOMICS DEPARTMENT MEASURING COMPETITION IN SLOVENIAN INDUSTRIES-ESTIMATION OF MARKUPS ECONOMICS DEPARTMENT WORKING PAPER No. 787
The global economic and financial crisis exacerbated the need for fiscal consolidation in many OECD countries. Drawing lessons from past episodes of fiscal consolidation, this paper investigates the economic environments, political settings and policy measures conducive to fiscal consolidation and debt stabilisation using probit, duration, truncated regression and bivariate Heckman selection methods. The empirical analysis builds on the earlier literature and extends it to include new aspects that may be of importance for consolidating governments. The empirical analysis confirms previous findings that the presence of fiscal rules – expenditure or budget balance rules – is associated with a greater probability of stabilising debt. Crucial in determining the causal link behind the association, the results also reveal an independent role for such rules over and above the impact of preferences for fiscal prudence. Also, while the analysis confirms that spending-driven adjustments vis-à-vis revenue-driven ones are more likely to stabilise debt, it also reveals that large consolidations need multiple instruments for consolidation to succeed. Sub-national governments, in particular state-level governments can contribute to the success of central government consolidation, if they co-operate. To ensure that state-level governments do co-operate, having the right regulatory framework with the extension of fiscal rules to sub-central government levels is important. Consolidation budgétaire : Partie 5. Quels sont les facteurs qui conditionnent la réussite des efforts d'assainissement budgétaire ? La crise economique et financiere mondiale a exacerbe l.imperatif d.assainir les finances publiques dans de nombreux pays de l.OCDE. Tirant les enseignements des episodes passes de reequilibrage budgetaire, ce document analyse les facteurs economiques, politiques et strategiques favorables a l.assainissement des finances publiques et a la stabilisation de la dette en utilisant la methode des probits, les modeles de duree, de regression tronquee et de selection en deux etapes de Heckman. L.analyse empirique s.inspire de travaux anterieurs qu.elle enrichit en integrant d.autres aspects qui peuvent etre importants pour les autorites qui optent pour une trajectoire d.assainissement budgetaire. Cette analyse empirique confirme les resultats anterieurs qui montraient que l.existence de regles budgetaires . regles de depenses ou d.equilibre budgetaire . est associee a une plus forte probabilite de stabilisation de la dette. Essentiels pour determiner le lien de causalite qui sous-tend cette association, les resultats revelent par ailleurs que ces regles jouent un role independant au-dela des effets d.une politique axee sur la prudence budgetaire. En outre, l.analyse confirme que les mesures de restriction des depenses sont plus susceptibles de stabiliser la dette que celles fondees sur l.augmentation des recettes, mais elle revele egalement que, pour reussir, les reequilibrages de grande ampleur doivent s.appuyer sur de multiple instrumen...
This paper examines how much of the dispersion in economic performance across OECD countries can be accounted for by economic geography factors. More specifically, two aspects of economic geography are examined, namely the proximity to areas of dense economic activity and endowments in natural resources. To do so, various indicators of distance to markets, transportation costs, and dependence on natural resources are added as determinants in an augmented Solow model, which serves as a benchmark. Three measures of distance to markets are found to have a statistically significant effect on GDP per capita: the sum of bilateral distances, market potential and the weighted sum of market access and supplier access. And the estimated economic impact is far from negligible. The reduced access to markets relative to the OECD average could contribute negatively to GDP per capita by as much as 10% in Australia and New Zealand. Conversely, a favourable impact of around 6-7% of GDP is found in the case of two centrally-located countries: Belgium and the Netherlands. Endowments in natural resources are also found to have a significant positive effect on GDP per capita, suggesting that OECD countries have, on average, escaped the natural resource curse or severe forms of the Dutch disease. The paper provides also some tentative evidence that spending on R&D and human capital might have a stronger effect on GDP per capita in countries with a higher degree of urban concentration. La contribution de l'économie géographique au PIB par tête Ce papier analyse la contribution des facteurs géographiques à la dispersion des performances économiques entre pays de l’OCDE. Plus particulièrement, deux aspects de l’économie géographique sont étudiés : la proximité de zones denses d’activités économiques et les dotations en ressources naturelles. Pour se faire, divers indicateurs de distance par rapport aux marchés, de coûts de transports, et de dépendance envers les ressources naturelles sont ajoutés comme déterminants dans un modèle de Solow augmenté, utilisé comme référence. Trois mesures de distance sont estimées avoir un effet significatif sur le PIB par habitant : la somme des distances bilatérales, le potentiel de marché et la somme pondérée de l’accès aux marchés et de l’accès aux fournisseurs. De plus, l’impact économique estimé est loin d’être négligeable. L’éloignement par rapport aux marchés pourrait pénaliser l’Australie et la Nouvelle Zélande, par rapport à la moyenne des pays de l’OCDE, à hauteur d’environ 10% de PIB. A l’inverse, la Belgique et les Pays Bas bénéficieraient de leur position centrale pour environ 6-7% de PIB. Les dotations en ressources naturelles sont estimées avoir un effet positif significatif sur le PIB par habitant, suggérant que les pays de l’OCDE ont, en moyenne, échappé au fléau des ressources naturelles ou aux formes sévères de la maladie hollandaise. Des premières indications suggèrent également que les dépenses en R&D et en capital humain peuvent avoir un effet plus fort sur le PIB par tête dans les p...
OECD Working Papers should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the author(s).
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