IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/3094.html
   My bibliography  Save this paper

Oil, agriculture, and the public sector: linking intersector dynamics in Ecuador

Author

Listed:
  • Verner, Dorte
  • Fiess, Norbert M.

Abstract

In a recent paper, Fiess and Verner (2000) analyse sectoral growth in Ecuador and find significant long-run and short-run relationships between the agricultural, industrial and service sectors. They take this as evidence against the dual economy model which rules out a long-run relationship between agricultural and industrial output and show further that a more detailed picture of the growth process can be discovered, once the agricultural, industrial and service sectors are disaggregated further into intrasector components. This paper extends their initial results and provides insight from a multivariate cointegration analysis of intrasector components. The authors are able to identify three cointegrating relationships, each of which has its own meaningful economic interpretation: Two cointegration relationships capture the direct and indirect effects of the"petrolization"of the Ecuadorian economy. A third relationship clearly indicates a link between agriculture and industrial activity. Since this third cointegrating relationship seems to coincide in time with the trade liberalisation at the end of the 1980s, promoting agriculture appears to be an important way to promote sustainable economic growth in Ecuador.

Suggested Citation

  • Verner, Dorte & Fiess, Norbert M., 2003. "Oil, agriculture, and the public sector: linking intersector dynamics in Ecuador," Policy Research Working Paper Series 3094, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3094
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2004/01/30/000265513_20040130125126/Rendered/PDF/wps3094.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    2. Mellor, John W. & Lele, Uma J., 1973. "Growth Linkages of the New Foodgrain Technologies," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 28(1), pages 1-22.
    3. Cheung, Yin-Wong & Lai, Kon S, 1993. "Finite-Sample Sizes of Johansen's Likelihood Ration Tests for Conintegration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(3), pages 313-328, August.
    4. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    5. Fiess, Norbert M. & Verner, Dorte, 2001. "Intersectoral dynamics and economic growth in Ecuador," Policy Research Working Paper Series 2514, The World Bank.
    6. Gene M. Grossman (ed.), 1996. "Economic Growth," Books, Edward Elgar Publishing, volume 0, number 553.
    7. Hendry, D.F. & Mizon, G.E., 1990. "Evaluating Dynamic Econometric Models By Encompassing The Var," Economics Series Working Papers 99102, University of Oxford, Department of Economics.
    8. Blunch, Niels-Hugo & Verner, Dorte, 1999. "Sector growth and the dual economy model - evidence from Cote d'Ivoire, Ghana, and Zimbabwe," Policy Research Working Paper Series 2175, The World Bank.
    9. Munisamy Gopinath & Terry L. Roe & Mathew D. Shane, 1996. "Competitiveness of U.S. Food Processing: Benefits from Primary Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 1044-1055.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nir Klein, 2010. "The Linkage between the Oil and Non-oil Sectors: A Panel VAR Approach," IMF Working Papers 2010/118, International Monetary Fund.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fiess, Norbert M. & Verner, Dorte, 2001. "Intersectoral dynamics and economic growth in Ecuador," Policy Research Working Paper Series 2514, The World Bank.
    2. Jason Allen & Robert Amano & David P. Byrne & Allan W. Gregory, 2009. "Canadian city housing prices and urban market segmentation," Canadian Journal of Economics, Canadian Economics Association, vol. 42(3), pages 1132-1149, August.
    3. Mohsen Bahmani-Oskooee & Taggert Brooks, 2003. "A new criteria for selecting the optimum lags in Johansen's cointegration technique," Applied Economics, Taylor & Francis Journals, vol. 35(8), pages 875-880.
    4. Tang, Chor Foon & Tan, Eu Chye, 2015. "Does tourism effectively stimulate Malaysia's economic growth?," Tourism Management, Elsevier, vol. 46(C), pages 158-163.
    5. M. T. Alguacil & V. Orts, 2003. "Inward Foreign Direct Investment and Imports in Spain," International Economic Journal, Taylor & Francis Journals, vol. 17(3), pages 19-38.
    6. Bashiri Behmiri, Niaz & Pires Manso, José R., 2012. "Does Portuguese economy support crude oil conservation hypothesis?," Energy Policy, Elsevier, vol. 45(C), pages 628-634.
    7. Neil R. Ericsson & James G. MacKinnon, 2002. "Distributions of error correction tests for cointegration," Econometrics Journal, Royal Economic Society, vol. 5(2), pages 285-318, June.
    8. Levent KORAP, 2008. "Exchange Rate Determination Of Tl/Us$:A Co-Integration Approach," Istanbul University Econometrics and Statistics e-Journal, Department of Econometrics, Faculty of Economics, Istanbul University, vol. 7(1), pages 24-50, May.
    9. Ericsson, Neil R & Hendry, David F & Mizon, Grayham E, 1998. "Exogeneity, Cointegration, and Economic Policy Analysis," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(4), pages 370-387, October.
    10. Irfan Civcir, 2003. "Before the Fall, Was the Turkish Lira Overvalued?," Eastern European Economics, Taylor & Francis Journals, vol. 41(2), pages 69-99, March.
    11. Irfan Civcir, 2003. "The Monetary Models of the Turkish Lira/U.S. Dollar Exchange Rate: Long-run Relationships, Short-run Dynamics, and Forecasting," Eastern European Economics, Taylor & Francis Journals, vol. 41(6), pages 43-63, January.
    12. Charles Yuji Horioka & Akiko Terada-Hagiwara, 2016. "The Impact of Pre-marital Sex Ratios on Household Saving in Two Asian Countries: The Competitive Saving Motive Revisited," ISER Discussion Paper 0975, Institute of Social and Economic Research, Osaka University.
    13. Mallory Mindy & Lence Sergio H., 2012. "Testing for Cointegration in the Presence of Moving Average Errors," Journal of Time Series Econometrics, De Gruyter, vol. 4(2), pages 1-68, November.
    14. Scott Hendry, 1995. "Long-Run Demand for M1," Macroeconomics 9511001, University Library of Munich, Germany.
    15. Tiwari, Aviral Kumar, 2012. "An empirical investigation of causality between producers' price and consumers' price indices in Australia in frequency domain," Economic Modelling, Elsevier, vol. 29(5), pages 1571-1578.
    16. Mansor H. Ibrahim, 2006. "Stock Prices and Bank Loan Dynamics in a Developing Country: The Case of Malaysia," Journal of Applied Economics, Taylor & Francis Journals, vol. 9(1), pages 71-89, May.
    17. Tsangyao Chang & Yuan-Hong Ho, 2002. "A Note on Testing ¡°Tax-and-Spend, Spend-and-Tax or Fiscal Synchronization¡±: The Case of China," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 27(1), pages 151-160, June.
    18. MacDonald, Ronald & Marsh, Ian W., 2004. "Currency spillovers and tri-polarity: a simultaneous model of the US dollar, German mark and Japanese yen," Journal of International Money and Finance, Elsevier, vol. 23(1), pages 99-111, February.
    19. Hassan, M. Kabir & Ngene, Geoffrey M. & Yu, Jung-Suk, 2015. "Credit default swaps and sovereign debt markets," Economic Systems, Elsevier, vol. 39(2), pages 240-252.
    20. Jude Okechukwu Chukwu, 2013. "Budget Deficits, Money Growth and Price Level in Nigeria," African Development Review, African Development Bank, vol. 25(4), pages 468-477, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:3094. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.