The Unassuming Economist

From a paper by Afees Salisu and Etsubdink Sileshi:

“In recent decades, many African countries have been experiencing structural transformation. During
this same period, these countries were witnessing unfavorable external balance. This has challenged
conventional wisdom as these two are considered to be moving in opposite directions. This study
examines the effect of the shift in sectoral composition of African economies on their external balance
position. Using balanced panel data for 38 countries from 2000 to 2022, we estimate the effect of
structural change measured by sectoral shares in value added to GDP on external balance (% GDP).
Our methodology includes both static and dynamic panel models. However the dynamic panel models(GMM) are found to be the appropriate ones. The results show that agricultural sector’s share of
GDP has a negative effect on external trade balance, while the industrial sector is found to have a
positive impact. These results are robust to various model specifications. For additional robustness
check, we also used control variables- foreign direct investment to GDP ratio and official exchange rate.
Our results are consistent in sign, magnitude of coefficients and significance levels. As far as external
trade balance is concerned, African countries should give the necessary support to the expansion of
industrial sector. We also advise future researches to examine the composition of the each sector in
Africa and its implication for the external balance.”

From a paper by Neha Gupta, Namita Sahay, and Miklesh Prasad Yadav:

“We analyse the asymmetric impact of oil prices on the stock markets of the BRICS nations. Employing the Nonlinear Autoregressive Distributed Lag (NARDL) model, we examine the weekly data spanning from October 29, 2010, to May 28, 2021 for West Texas Intermediate (WTI) spot prices in USD per barrel, alongside stock price data from official stock market indices websites. The findings reveal a substantial long-run association of oil prices with stock markets of BRICS nations except South Africa with significant asymmetry observed in both short and long-term impacts. Specifically, fluctuations in oil prices exhibit divergent effects on stock markets within these nations necessitating nuanced policy responses. Investors and portfolio managers are encouraged to adopt nonlinear models for forecasting and portfolio management leveraging asymmetric effects for risk mitigation strategies. These suggestions underscore the importance of recognizing the nonlinear and asymmetric nature of oil price dynamics in shaping investment decisions and formulating effective policy measures to mitigate associated risks in BRICS stock markets.”

From a paper by Aina B. Aidarova, Aissulu Nurmambekovna Ramashova, Karlygash Baisholanova, Galiya Jaxybekova, Aliy Imanbayev, Indira Kenzhebekova, and Dinmukhamed Kelesbayev:

“In 2001, Jim O’Neil coined the term “BRIC” to refer to the economies of Brazil, Russia, India and China. In 2011, South Africa joined the group, and it was updated to “BRICS.” These countries have a significant impact on the world economy, and there are numerous studies examining their macroeconomic structures. This study focuses on the relationship between economic growth, oil revenues, and inflation levels in BRICS countries from 2000 to 2021 and uses panel cointegration analysis. Many studies showed a relationship between these variables in different countries and unions. This study aims to determine if these relationships hold for BRICS countries. The results suggest a cointegration relation and a causality relation between economic growth, inflation, and oil revenues in BRICS countries. This finding demonstrates the impact of energy, specifically oil revenues, on economic growth. However, other macro indicators also affect economic growth, as suggested by existing literature. Therefore, future studies could improve on this research by including additional social and economic variables to evaluate the impact of oil revenues on economic growth from multiple perspectives.”

From a paper by Yushi Xu, Baifan Chen, Jionghao Huang, Qingsha Hu, and Shuning Kong:

“This study innovatively combines the structural vector autoregression model with a novel frequency connectedness approach to explore the dynamic connectedness between heterogeneous oil price shocks and inflation across both developed and emerging economies. By investigating the connectedness relationship between oil shocks and inflation from the G7 (Group of Seven countries) and BRICS (Brazil, Russia, India, China, and South Africa) countries, our findings reveal a significantly dynamic heterogeneous oil–inflation nexus. Firstly, our analysis reveals that oil supply shocks predominantly serve as receivers of inflation, whereas aggregate demand and oil-specific demand shocks primarily act as transmitters. Additionally, the connectedness between oil price shocks and inflation is mainly driven by long-term factors and exhibits notable time-varying characteristics, with significant increases in connectedness strength observed during periods of oil and financial crises. Lastly, our study shows that developed economies are more inclined to transmit shocks to the global crude oil market, while their vulnerability to external shocks from the international crude oil market is markedly heightened by greater resource dependence and a lack of self-sufficiency. This study not only provides a new perspective on understanding the intricate relationship between oil price shocks and inflation but also offers a crucial theoretical framework and empirical evidence to assist policymakers and investors in navigating the fluctuations of the global energy market.”

From a post by Matthew E. Kahn:

“I like Peter Coy’s new New York Times column and want to use it to discuss the climate change adaptation challenge.

Here is a direct quote from Coy;

“Knight’s thinking is as relevant now as it was in 1921, when “Risk, Uncertainty and Profit” was published. We still need tools for coping with uncertainty. Knight’s perspective can guide us to a middle course between trying to avoid uncertainty entirely, which is impossible, and plunging headlong into the darkness, which is reckless.

Knight has been forgotten or misconstrued repeatedly over the past century. A new book by the scholar Amar Bhidé brings back his original insights and dares to try to improve upon them — mostly by extending them into realms that Knight didn’t consider, such as the persuasive techniques that entrepreneurs use to overcome the uncertainty felt by investors, customers and partners.”

Peter Coy has not interviewed me about my work on Knightian Uncertainty applied to climate change adaptation. In my academic writing and in my 2021 book Adapting to Climate Change,“

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