Examinando por Autor "Goda, Thomas"
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Ítem Absolute Income Inequality and Rising House Prices(Universidad EAFIT, 2016-12-01) Goda, Thomas; Stewart, Chris; Torres García, Alejandro; tgoda@eafit.edu.co; atorres7@eafit.edu.coIncome inequality and house prices have risen sharply in developed countries during the last three decades. We argue that this co-movement is no coincidence but that inequality has driven up house prices on the grounds that it raises the total demand for houses, which inflates their prices considering supply restrictions. To test this hypothesis, we conduct cointegration tests for a panel of 18 OECD countries for the period 1975-2010. The results suggest that income inequality and house prices in most OECD countries are positively correlated and cointegrated, and that in the majority of cases absolute inequality Granger-causes house prices when measured in absolute terms. Relative inequality, on the other hand, is not cointegrated with house prices, which is expected given that total house demand depends on the absolute amount of investible income.Ítem Absolute Income Inequality and Rising House Prices(2016-12-01) Goda, Thomas; Stewart, Chris; Torres García, A.; Goda, Thomas; Stewart, Chris; Torres García, A.; Universidad EAFIT. Departamento de Economía y Finanzas; Estudios en Economía y Empresa (GEE)Income inequality and house prices have risen sharply in developed countries during the last three decades. We argue that this co-movement is no coincidence but that inequality has driven up house prices on the grounds that it raises the total demand forÍtem Absolute Inequality and Violent Property Crime(Universidad EAFIT, 2016-08-22) Goda, Thomas; Torres, Alejandro; tgoda@eafit.edu.co; atorres7@eafit.edu.coRational choice models argue that income inequality leads to a higher expected utility of crime and thus generates incentives to engage in illegal activities. Yet, the results of empirical studies do not provide strong support for this theory; in fact, Neumayer provides apparently strong evidence that income inequality is not a significant determinant of violent property crime rates when a representative sample is used and country specific fixed effects are controlled for. An important limitation of this and other empirical studies on the subject is that they only consider proportional income differences, even though in rational choice models absolute difference in legal and illegal incomes determine the expected utility of crime. Using the same methodology and data as Neumayer, but using absolute inequality measures rather than proportional ones, this paper finds that absolute income inequality is a statistically significant determinant of robbery and violent theft rates. This result is robust to changes in sample size and to different absolute inequality measures, which not only implies that inequality is an important correlate of violent property crime rates but also suggests that absolute measures are preferable when the impact of inequality on property crime is studied.Ítem A case for redistribution? Income inequality and wealth concentration in the recent crisis(Universidad EAFIT, 2014-08-01) Goda, Thomas; Onaran, Özlem; Stockhammer, Engelbert; tgoda@eafit.edu.co; o.onaran@gre.ac.uk; e.stockhammer@kingston.ac.ukSeveral Nobel laureates economists have called for redistributive policies. This paper shows that there is a strong case for redistributive policies because the global increase of income inequality and wealth concentration was an important driver for the financial and Eurozone crisis. The high levels of income inequality resulted in balance of payment imbalances and rising debt levels. Rising wealth concentration contributed to the crisis because the increasing asset demand from the rich played a key role in the rise of the structured credit market and enabled poor and middle-income households to accumulate increasing amounts of debt. To tame the inherent instability of the current mode of capitalism it is necessary to reduce inequality.Ítem Class or location? What explains the rising tide of absolute global income inequality during 1850-2010?(Universidad EAFIT, 2015-03-01) Goda, Thomas; Torres, AlejandroThis paper is the first to decompose absolute global income inequality into its within-country class and between-country location components. The estimates show that until 1970 locational income differences were the main driver of absolute global inequality, whereas its recent growth can be explained primarily by class differences. Nowadays, inequality between classes explains 70% of absolute global market inequality. Additional findings are that absolute income convergence between countries took place after 2005, that it is possible to reduce absolute inequality and to grow at the same time, and that of late within countries net inequality was growing faster than market inequality.Ítem ¿Cómo nos afecta la desigualdad?(2016) Goda, Thomas; Ramírez Aristizábal, María; González Cotes, Ana María; Arango Uribe, María Adelaida; Londoño Rivera, Ana María; Goda, Thomas; Ramírez Aristizábal, María; González Cotes, Ana María; Arango Uribe, María Adelaida; Londoño Rivera, Ana MaríaÍtem The contribution of us bond demand to the us bond yield conundrum of 2004 to 2007: an empirical investigation(Universidad EAFIT, 2011-12-12) Goda, Thomas; Lysandrou, Photis; Stewart, ChrisAlthough the federal funds rate started rising from mid-2004 US long term rates continued to fall. A likely contributory factor to this conundrum was the contemporaneous increase in US bond demand. Using ARDL-based models, which accommodate structural breaks, this paper estimates the impact of demand on US bond yields in the conundrum period. This impact is shown to have been everywhere significantly negative. The fact that our model fully explains the bond yield conundrum gives support to the hypothesis that the US CDO market was rapidly expanded before 2007 chiefly to absorb the overspill of global demand for safe assetsÍtem The contribution of wealth concentration to the subprime crisis: a quantitative estimation(Oxford University Press on behalf of the Cambridge Political Economy Society., 2014-03-03) Goda, Thomas; Lysandrou, Photis; Universidad EAFIT, Colombia; City University and School of Oriental and African Studies (SOAS), UK; Escuela de Economía y Finanzas; Economía; Estudios en Economía y EmpresaThe crisis that broke out in mid-2007 was caused by the fact that the collateralised debt obligation (CDO) market had grown to a size sufficient to wreak general havoc when it suddenly collapsed. Several authors have argued that economic inequality was important to the growth of this market. This paper attempts to strengthen this argument by concentrating attention on global wealth concentration. After summarising recent evidence on the negative impact of investor demand on US bond yields in the pre-crisis period, new evidence regarding the specific contribution of high-net-worth individuals to this negative impact is presented. The paper then goes on to show how, after having helped to cause a yield problem in the major US debt markets, high-net-worth individuals (via hedge funds) continued to be a major source of the pressure on US banks to resolve this yield problem through the mass production of CDOs.Ítem The contribution of wealth concentration to the subprime crisis: a quantitative estimation.(Universidad EAFIT, 2011-11-16) Goda, Thomas; Lysandrou, PhotisÍtem Determinants of real exchange rate movements in 15 emerging market economies(Universidad EAFIT, 2019-10-01) Goda, Thomas; Priewe, Jan; tgoda@eafit.edu.coPrevious work has established that an appreciation of the real exchange rate (REER) con-tributes to premature deindustrialization, less productive investment and dependence on commodity booms and busts in emerging markets economies (EME). From the literature, it is less clear, however, what the most important drivers for the cyclical REER movements in EME are. The main aim of this study is to provide empirical evidence about the determinants of the REER movements of 15 emerging markets during the last two decades, using statistical analysis and a dynamic panel fixed effects model approach. Our analysis shows that although “commodity” and “industrial” EME are heterogeneous, REER volatility tends to be higher among the former. Yet, REER volatility between emerging and advanced countries does not differ very much, apart from a few countries. EME that had more stable REER fared better than those that had a depreciating or appreciating trend (with the notable exception of China). As theoretically expected, commodity prices are an important structural driver of REER movements in “commodity EME”. Moreover, the results confirm the existence of the Harrod-Balassa-Samuelson effect, and show the importance of financial inflows. Further, the interventions of central banks were partially successful to avoid more substantial appre-ciations (depreciations). Finally, we find that lower country risk and, at least in some peri-ods, growing broad money in OECD countries has led to REER appreciations in our sample countries.Ítem Efectos diferenciales de la tasa de cambio real sobre el comercio internacional en Colombia(Universidad EAFIT, 2017-06-01) Torres, Alejandro; Goda, Thomas; Sanchez, Santiago; Romero, Adriana; tgoda@eafit.edu.co; atorres7@eafit.edu.co; ssanch40@eafit.edu.co; aromero9@eafit.edu.coDuring the 2006-2013 period, Colombia experienced on the strongest appreciations in the world. During this same period, the volume of manufacturing exports fell nearly 50%, while the volume if imports rose in the same quantity. This work aims to determine the effect of the real exchange rate on the flow of international commerce in the manufacturing sector. For this end, and as a main approach, sub-sectoral real exchange rate indices are calculated for 19 manufacturing subsectors, noting the potential existence of heterogeneities between them. The price elasticities for exports and imports are also estimated using the bilateral and sub-sectoral real exchange rate index. The results indicate the existence of important differences between the behavior of the real exchange rate between subsectors, and that these differences explain the behavior of exports in the different manufacturing sectors, although the results are not so clear for the case of imports. These results suggest that policymakers should consider the differential effects of their policies on manufacturing performance when they affect the real exchange rate.Ítem Export Market Size Matters: The effect of the market size of export destinations on manufacturing growth(Universidad EAFIT, 2022-11-09) Goda, Thomas; Sánchez, Santiago; Universidad EAFITLiterature contends that the manufacturing sector is crucial for economic development, and it is conventional wisdom that exports drive manufacturing growth. However, it has not yet been established empirically whether the market size of export destinations is an important factor to explain diverging regional and sectorial manufacturing growth patterns. This article argues that accessing large external markets reduces transaction costs, increases expectations of economies of scale and fosters capital formation. To test this hypothesis, we construct a novel Relative Export Market Size (REMS) index that measures whether the share of sectoral exports that are destined to large economies in one region is higher than in other regions. Using a PVAR model, we verify the impact of the REMS index on value added, employment and capital accumulation of 129 manufacturing sectors in 23 regions in Colombia during the period 1992-2017. The obtained results show that exporting to larger markets has a positive impact on employment, capital formation and value added per capita of manufacturing sectors at a regional level. This finding indicates that exporting to the largest market of the world helps to develop competitive manufacturing sectors.Ítem Global trends in relative and absolute income inequality(Universidad EAFIT, 2016-06-22) Goda, ThomasÍtem Global trends in relative and absolute wealth concentrations(Universidad EAFIT, 2014-01-21) Goda, ThomasThis paper compares changes in relative and absolute wealth concentrations to establish if both processes have followed similar trajectories. The findings indicate that while the level of relative wealth concentration has increased recently, it is not extraordinarily high in an historical perspective. On the contrary, the level of absolute wealth concentration is most likely higher than that previously occurred because of the increase in the wealth holdings and population size of high net worth individuals. The sustainability of this on-going absolute concentration of wealth is questionable insofar as the resulting pressure of investor demand for safe securities poses a potential threat for financial stability.Ítem The impact of effective corporate tax rates on investment(Universidad EAFIT, 2020-06-25) Ballesteros, Sebastián; Goda, Thomas; togoda@eafit.edu.coThere exists an intense debate about the effects of corporate tax cuts on the formation of private capital in the real sector. This paper studies the investment impact of the effective fiscal burden of firms during the period 1995-2014. To this end, in a first step national accounts data is used to calculate backward looking average Effective Corporate Tax Rates (ECTR) for 73 developed and developing countries. In a second step, a dynamic panel approach is employed to estimate the impact of the ECTR on private gross fixed capital formation and foreign direct investment inflows. The obtained results indicate that: (i) ECTR not only tend to be much lower than statutory corporate tax rates, but also have different dynamics over time; and (ii) there exists no clear statistically significant negative relationship between ECTR and private investment. Instead, private capital formation and FDI inflows are rather explained by economic growth, the persistence of investment spending, trade openness, and the quality of institutions. This finding is robust when alternative effective corporate tax rate measures or statutory corporate tax rates are consideredÍtem Market and disposable top income shares adjusted by national accounts data(Universidad EAFIT, 2017-08-01) Goda, Thomas; Sanchez, Santiago; tgoda@eafit.edu.co; ssanch40@eafit.edu.coThis paper uses national accounts data to adjust market and disposable Top 10% and Top 1% household survey income shares for 39 developed and developing countries that are part of the Luxembourg Income Study (LIS). An additional novelty of this study is the distinction between labor and capital income. The obtained results suggest that for most countries top income shares are significantly higher than those reported in household surveys, which mainly underestimate top capital income. While the presented results should be treated with some caution, our easy-to-implement approach seems suitable for countries for which no tax data is available.Ítem Natural resource-seeking FDI inflows and current account deficits in commodity-producing developing economies(Universidad EAFIT, 2017-01-24) Rios Ballesteros, Nathalia; Goda, Thomas; nriosba@eafit.edu.co; atorres7@eafit.edu.coNatural resource-seeking foreign direct investment (FDI) rose substantially during the last two decades as global commodity prices soared. This type of FDI typically is expected to improve the current accounts of recipient countries. Notwithstanding the commodity boom, however, current account balances of many commodity-producing developing economies were negative during 1995–2013. Considering 31 commodity-producing countries, we find that the average net effect of a 1% increase in natural resource-seeking FDI was a 0.23% decline in the current account (measured as percentage of GDP). This surprising result can be explained by the repatriation of profits.Ítem Overvaluation of the real exchange rate and the Dutch Disease: the Colombian case.(Universidad EAFIT, 2013-11-12) Goda, Thomas; Torres, AlejandroIn this study, we estimate the impact of the 2004-2012 energy and mining boom on the real effective exchange rate in Colombia and the sectoral composition of its economy. To this end, we introduce the new “extended Dutch Disease” concept, according to which a currency appreciation may not only occur due to traditional “spending” and “relocation” effects but also due to exports and massive inflows of external capital that finances the booming sector. The empirical results indicate that Colombia experienced an overvaluation of its real exchange rate, which in turn negatively affected the competitiveness of its manufacturing and agricultural sector.Ítem Sectoral real exchange rates and manufacturing exports: A case study of Latin America(Universidad EAFIT, 2021-08-12) Goda, Thomas; Torres García, Alejandro; Larrahondo Dominguez, Cristhian David; Universidad EAFITStandard theory considers the real exchange rate (RER) as an export determinant. A common limitation of cross-country evidence is the use of effective (REER) or bilateral (BRER) RER indices, both of which have the same values across sectors. The novel contributions of this paper are to propose a variety of goods trade model, to exploit exchange rate variations across sectors by constructing a unique sectoral bilateral RER index (SBRER) for 12 Latin American countries, 21 sectors and 38 trade partners, and to estimate empirically the effect of SBRER movements on Latin American manufacturing exports during 2001-2018. The obtained results show that the SBRER is a statistically significant determinant of aggregate manufacturing exports, whereas the REER coefficient has an unexpected sign and the BRER appears not to be significant. Moreover, sectoral export elasticities indicate that in Latin America mainly low-technology sectors are affected by SBRER movements. Overall, these findings make evident that it is important to consider sectoral heterogeneity regarding trade partners and production costs when estimating RER export elasticities from a macroeconomic perspective and they provide new evidence on the effect of RER movements on Latin American exports.Ítem Tasa de cambio real y recomposición sectorial en Colombia(Universidad EAFIT, 2013-08-08) Goda, Thomas; Torres, AlejandroEste trabajo analiza el impacto del boom minero-energético experimentado por la economía colombiana en el período 2004-2012 sobre la tasa de cambio real y la participación de los sectores manufacturero e industrial. Para ello se introduce el concepto de “Enfermedad holandesa extendida”, que considera la posible apreciación de la tasa de cambio real no sólo por los efectos tradicionales de “relocalización” y “gasto”, sino además por la entrada masiva de capitales para financiar la explotación de estos sectores. Los resultados empíricos demuestran, por un lado, que la Inversión Extranjera Directa y los Flujos de Portafolio efectivamente generaron una sobreapreciación de la tasa de cambio real que afectó la competitividad de los demás sectores, disminuyendo en consecuencia su participación en el PIB.