Three Essays on Macroeconomics

• Main Authors: Yi-Chen Wu, 吳宜臻
• Other Authors: Chih-Chiang Hsu
• Format: Others
• Language: en_US
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/74323373439184097587

博士 === 國立中央大學 === 經濟學系 === 104 === This dissertation consists of three independent yet related essays that study the topic of macroeconomics, including income inequality and economic development. The three essays are organized as follows. Chapter 1 of the dissertation introduces the main issues of income inequality and economic development. Chapter 2 discusses foreign direct investment (FDI) and income inequality, Chapter 3 reports on governance, government size, and economic development empirical studies, and Chapter 4 debates the long-run relationship between health care expenditure and economic development. Chapter 2 employs cross-country data for the period from 1970 to 2005 to test for potential income thresholds in the FDI-inequality nexus. The results find that in a low-income regime, FDI exerts a disproportionately positive impact on the relatively poor and hence improves income distribution. In a high-income regime, FDI benefits everyone in a society under a similar fashion and thus has no significant impact on income distribution. Chapter 3 debates the role of government in the process of economic development and highlights how government can affect economic performance by its sheer size and its quality. The study conducts heterogeneous panel cointegration techniques in a common factor modeling framework. For a sample of developed and developing countries over the period 1984-2011, the empirical results present that, on average or in general, better governance significantly improves economic development whereas government size measured by government expenditure exerts a significant and negative effect on economic development. When proxied by taxes, government size increases economic development, on average. However, large variations are also detected, which means that some countries may benefit from large government size while some countries may lose from large taxation. Chapter 4’s aim is to analyze the effects of health expenditure on economic development. Particularly, this study utilizes heterogeneous panel cointegration techniques in a mean group-modeling framework (Pedroni, 2001). During the period 1995-2011, we discover that health care expenditure, on average, exerts a significant and negative effect on economic development in separate group samples of middle-income and high-income countries. As for low-income countries, health care expenditure exerts negligible impacts, in general, whereas large differences among countries do exist.