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This paper extends the long-run growth model of Esfahani et al. (2009) to a labor exporting country that receives large inflows of external income?the sum of remittances, FDI and general government transfers?from major oil-exporting economies. The theoretical model predicts real oil prices to be one of the main long-run drivers of real output. Using quarterly data between 1979 and 2009 on core macroeconomic variables for Jordan and a number of key foreign variables, we identify two long-run relationships: an output equation as predicted by theory and an equation linking foreign and domestic inflation rates. It is shown that real output in the long run is shaped by: (i) oil prices through their impact on external income and in turn on capital accumulation, and (ii) technological transfers through foreign output. The empirical analysis of the paper confirms the hypothesis that a large share of Jordan's output volatility can be associated with fluctuations in net income received from abroad. External factors, however, cannot be relied upon to provide similar growth stimuli in the future, and therefore it will be important to diversify the sources of growth in order to achieve a high and sustained level of income.

Economic development --- Exports --- Petroleum products --- Mazut --- Petroleum --- Hydraulic fluids --- International trade --- Econometric models. --- Prices --- Refining --- Investments: Energy --- Foreign Exchange --- Inflation --- Macroeconomics --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- State Space Models --- Forecasting and Other Model Applications --- General Aggregative Models: Forecasting and Simulation --- Economic Growth of Open Economies --- Macroeconomic Aspects of International Trade and Finance: Forecasting and Simulation --- Exhaustible Resources and Economic Development --- Energy: Demand and Supply --- Personal Income, Wealth, and Their Distributions --- Price Level --- Deflation --- Energy: General --- Investment & securities --- Currency --- Foreign exchange --- Oil prices --- Personal income --- Oil --- Purchasing power parity --- National accounts --- Commodities --- Income --- Petroleum industry and trade --- Jordan

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Productivity growth in Italy has been persistently anemic and has lagged that of the euro area over the period 1999-2015, while the indebtedness of its corporate sector has increased. Using the ORBIS firm-level database, this paper studies the long-term impact of persistent corporate-debt accumulation on the productivity growth of Italian firms and investigates whether total factor productivity growth varies with the level of corporate indebtedness. We employ a novel estimation technique proposed by Chudik, Mohaddes, Pesaran, and Raissi (2017) to account for dynamics, bi-directional feedback effects, cross-firm heterogeneity, and cross-sectional dependence arising from unobserved common factors (for example, oil price shocks, labor and product market frictions, and stance of global financial cycle). Filtering out the effects of unobserved common factors and controlling for firmspecific characteristics, we find significant negative effects of persistent corporate debt build-up on total factor productivity growth, and weak evidence of a threshold level of corporate debt, beyond which productivity growth drops off significantly. Our results have strong policy implications, for example the design of the tax system should discourage persistent corporate debt accumulation, and effective and timely frameworks to reduce corporate debt overhangs are essential.

Exports and Imports --- Industries: Manufacturing --- Production and Operations Management --- Production --- Cost --- Capital and Total Factor Productivity --- Capacity --- Macroeconomics: Production --- International Lending and Debt Problems --- Industry Studies: Manufacturing: General --- Human Capital --- Skills --- Occupational Choice --- Labor Productivity --- 'Panel Data Models --- Spatio-temporal Models' --- Firm Behavior: Empirical Analysis --- Macroeconomics --- International economics --- Manufacturing industries --- Total factor productivity --- Productivity --- Debt burden --- Manufacturing --- Labor productivity --- External debt --- Economic sectors --- Industrial productivity --- Debts, External --- Italy

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This paper examines whether a tipping point exists for real GDP growth in Italy above which the ratio of non-performing loans (NPLs) to total loans falls significantly. Estimating a heterogeneous dynamic panel-threshold model with data on 17 Italian regions over the period 1997–2014, we provide evidence for the presence of growth-threshold effects on the NPL ratio in Italy. More specifically, we find that real GDP growth above 1.2 percent, if sustained for a number of years, is associated with a significant decline in the NPLs ratio. Achieving such growth rates requires decisively tackling long-standing structural rigidities and improving the quality of fiscal policy. Given the modest potential growth outlook, however, under which banks are likely to struggle to grow out of their NPL overhang, further policy measures are needed to put the NPL ratio on a firm downward path over the medium term.

Financial crises. --- Financial crises --- Crashes, Financial --- Crises, Financial --- Financial crashes --- Financial panics --- Panics (Finance) --- Stock exchange crashes --- Stock market panics --- Crises --- Econometrics --- Finance: General --- Industries: Financial Services --- 'Panel Data Models --- Spatio-temporal Models' --- Financial Markets and the Macroeconomy --- Bankruptcy --- Liquidation --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Truncated and Censored Models --- Switching Regression Models --- Threshold Regression Models --- General Financial Markets: Government Policy and Regulation --- Finance --- Econometrics & economic statistics --- Nonperforming loans --- Threshold analysis --- Distressed assets --- Financial institutions --- Econometric analysis --- Financial sector policy and analysis --- Loans --- Banks and banking --- Italy

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This paper employs a dynamic multi-country framework to analyze the international macroeconomic transmission of El Niño weather shocks. This framework comprises 21 country/region-specific models, estimated over the period 1979Q2 to 2013Q1, and accounts for not only direct exposures of countries to El Niño shocks but also indirect effects through thirdmarkets. We contribute to the climate-macroeconomy literature by exploiting exogenous variation in El Niño weather events over time, and their impact on different regions crosssectionally, to causatively identify the effects of El Niño shocks on growth, inflation, energy and non-fuel commodity prices. The results show that there are considerable heterogeneities in the responses of different countries to El Niño shocks. While Australia, Chile, Indonesia, India, Japan, New Zealand and South Africa face a short-lived fall in economic activity in response to an El Niño shock, for other countries (including the United States and European region), an El Niño occurrence has a growth-enhancing effect. Furthermore, most countries in our sample experience short-run inflationary pressures as both energy and non-fuel commodity prices increase. Given these findings, macroeconomic policy formulation should take into consideration the likelihood and effects of El Niño weather episodes.

Business cycles -- Econometric models. --- Climatic extremes -- Econometric models. --- Economic development -- Econometric models. --- Natural disasters -- Econometric models. --- Prices -- Econometric models. --- Meteorology & Climatology --- Earth & Environmental Sciences --- Investments: Commodities --- Econometrics --- Inflation --- Macroeconomics --- Natural Disasters --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- State Space Models --- International Business Cycles --- Economic Development: Agriculture --- Natural Resources --- Energy --- Environment --- Other Primary Products --- Climate --- Natural Disasters and Their Management --- Global Warming --- Commodity Markets --- Price Level --- Deflation --- Energy: Demand and Supply --- Prices --- Agriculture: General --- Econometrics & economic statistics --- Investment & securities --- Natural disasters --- Commodity prices --- Oil prices --- Vector autoregression --- Agricultural commodities --- Econometric analysis --- Farm produce --- United States

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This paper contributes to the debate on the relationship between public-capital accumulation and private investment in India along the following dimensions. First, acknowledging major structural changes that the Indian economy has undergone in the past three decades, we study whether public investment in recent years has become more or less complementary to private investment in comparison to the period before 1980. Second, we construct a novel data-set of quarterly aggregate public and private investment in India over the period 1996Q2-2015Q1 using investment-project data from the CapEx-CMIE database. Third, embedding a theory-driven long-run relationship on the model, we estimate a range of Structural Vector Error Correction Models (SVECMs) to re-examine the public and private investment relationship in India. Identification is achieved by decomposing shocks into those with transitory and permanent effects. Our results suggest that while public-capital accumulation crowds out private investment in India over 1950-2012, the opposite is true when we restrict the sample post 1980 or conduct a quarterly analysis since 1996Q2. This change can most likely be attributed to the policy reforms which started during early 1980s and gained momentum after the 1991 crises.

Saving and investment --- Public investments --- Government investments --- Investments, Public --- Expenditures, Public --- Investments --- Capital budget --- Economic development projects --- Investment of public funds --- Accumulation, Capital --- Capital accumulation --- Capital formation --- Investment and saving --- Saving and thrift --- Capital --- Supply-side economics --- Wealth --- Econometric models. --- Finance --- Infrastructure --- Investments: General --- Public Finance --- Production and Operations Management --- Multiple or Simultaneous Equation Models --- Multiple Variables: General --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- State Space Models --- Investment --- Intangible Capital --- Capacity --- National Government Expenditures and Related Policies: Infrastructures --- Other Public Investment and Capital Stock --- Debt --- Debt Management --- Sovereign Debt --- Macroeconomics: Production --- Public finance & taxation --- Macroeconomics --- Public investment spending --- Private investment --- Government debt management --- Productivity --- Expenditure --- National accounts --- Public financial management (PFM) --- Production --- Debts, Public --- Industrial productivity --- India