A System of Simultaneous Equations (SEM) for the Study of the Effectiveness of the Japanese Monetary Policy

In this paper, the authors study the effectiveness of the Japanese monetary policy set by the Bank of Japan (BOJ) to contrast the three major crises that the country has experienced since the second half of the 90s: that of the lost decade, that of 2008 and that of the Covid-19 pandemic. To this end, they use a particular type of mathematical-statistical model that is widely applied today in the economic field, namely a simultaneous equation model (SEM). This simultaneous equation model is estimated through an Iteratively reweighted least squares (IRLS) using quarterly historical series in the sample period Q1 1994 - Q2 2020. All data are in real terms. The results, appropriately compared with those of other authors, suggest that the monetary policy has a (limited) impact only on the interbank market. The fiscal policy, instead, has a greater ability to influence the money supply, the private consumption and the inflation expectations.

SOLUTION OF SIMULTANEOUS EQUATIONS OF COSINE LAW ARISING FROM SUBJECTIVITY GEOMETRY

This paper discusses the solution of a group of two-order six elements rooted algebraic simultaneous equations set up by cosine law arising from the application example of subjectivity geometry[1]. By means of the implicit function theorem, this paper proves that there exists a unique real solution of those equations. Transforming this problem into an unconstrained nonlinear optimization problem, the solution can be found by known methods. 4 numerical example by descent method is given.

Introduction of Simultaneous Equations

In primary school,you would have come across problem like the one shown below. 3 chickens and 4 ducks cost $ 99. 2 chickens and 3 ducks cost $ 71. Find the cost of 1 duck.

Empirical Research on the Relationship between Education Poverty Alleviation and Rural Revitalization—Spatial Panel Simultaneous Equation Model Based on Provincial Panel Data

On the basis of using entropy weight method to measure China’s education poverty alleviation and rural revitalization evaluation indicators, using the panel data of 30 provinces in China (excluding Xizang, Hong Kong, Macao and Taiwan) from 2012 to 2021, a spatial panel simultaneous equation model is constructed based on adjacency matrix, geographical distance matrix and economic geographical distance matrix deeply study the interaction mechanism and spatial spillover effects between education poverty alleviation and rural revitalization through the generalized spatial three-stage least squares method (GS3SLS). The results indicate that there is a significant spatial spillover effect and a positive spatial correlation between education poverty alleviation and rural revitalization, and there is a significant interactive effect between the two variables, while promoting each other positively. Therefore, the government should clarify the deep relationship between education poverty alleviation and rural revitalization based on the current background, and better consolidate and expand the effective connection between the achievements of education poverty alleviation and rural revitalization.

Household Income and Expenditure Relationships： A Simultaneous Equation Approach

Income and expenditure are highlighted in this study as they currently affect the quality of life of the Malaysian society. In the Ninth Malaysia Plan （2006-2010） poverty eradication was emphasized as one of the socio-economic targets to uplift those poor households from the fast moving modern sectors of the economy. The primary objective of this paper is therefore to identify income and expenditure relationships among the households of the east coast of Peninsular Malaysia during the current economic downturn. Attempts to analyze household consumption as a share of total income and to identify factors contributing to household income and expenditure have become a topic of interest in literature. A substantial portion of household income devoted to productive loans characterizes the majority of Malaysians as the economy progresses to a more advance stage. A significant and strong relationship between income and types of household expenditure is explored from the socio-economic perspectives. Using primary data a system of simultaneous equations, namely the two stage least squares （2SLS） was applied. This paper identifies crucial variables associated with the income and expenditure. Some of these variables showing high correlation with the total expenditure are the housing loan, automobile loan and educational expenditure.

Estimating Crash Rate of Freeway Segments Using Simultaneous Equation Model

This study develops crash rate prediction models based on the premise that crash frequencies observed from adjacent paired non-weaving and weaving freeway segments are spatially correlated and therefore requires a simultaneous equation modeling approach. Simultaneous equation models for paired freeway non-weaving segments and weaving segments along with combined three freeway segments upstream and downstream were developed to investigate the relationship of crash rate with freeway characteristics. The endogenous variables have significant coefficients which indicate that unobserved variables exist on these contiguous segments, resulting in different crash rates. AADT is a variable that can show the interaction between the traffic and crashes on these contiguous segments. The results corroborate such an interaction. By comparing the simultaneous equation model and the multiple linear regression model, it is shown that more model parameters in the simultaneous models are significant than those from linear regression model. This demonstrates the existence of the correlation between the interchange and between-interchange segments. It is crucial that some variables like segment length can be identified significant in the simultaneous model, which provides a way to quantify the safety impact of freeway development.

Factors and mechanism driving the land-use conversion in Jiangxi Province

This article explores the factors and mechanism driving the land-use conversion at regional level by developing and using an econometric approach which is called the simultaneous equations model （SEM）. A case study in Jiangxi Province of China is conducted by establishing the SEM, which consists of three equations including agricultural production, land conversion of cultivated land to built-up area and land conversion of cultivated land to forest cover/grassland from 1988 to 2005. And then this paper employs the method of piecewise estimation to represent the influences of the factors such as population, society, economy, location and geophysical conditions on the process of land-use conversion in Jiangxi Province. Estimation results show that population is a predominant factor driving the land-use conversion at counties, while social and economic factors are determinant factors in the short term for the entire Jiangxi Province. Specifically, the size of agricultural population and the magnitude of agricultural input determine the agricultural production to a large extent; population size, plain area proportion at counties and land management policies together affect the direction and magnitude of conversion between cultivated land and built-up area; agricultural population proportion, terrain slope, grain production and non-agricultural industry promote the conversion of cultivated land to forest cover/grassland. Furthermore, the explored mechanism also reveals the underlying causes of the land use changes driven by a series of factors in Jiangxi Province. Finally, this paper concludes that factors proven to play an important role in driving the land-use conversion need to be considered when the land management agencies make out the land use planning to optimize the land use, expand the agricultural production, and conserve the cultivated land.

Developing individual tree-based models for estimating aboveground biomass of five key coniferous species in China

Estimating individual tree biomass is critical to forest carbon accounting and ecosystem service modeling.In this study,we developed one-（tree diameter only） and two-variable（tree diameter and height） biomass equations,biomass conversion factor（BCF） models,and an integrated simultaneous equation system（ISES） to estimate the aboveground biomass for five conifer species in China,i.e.,Cunninghamia lanceolata（Lamb.） Hook.,Pinus massoniana Lamb.,P.yunnanensis Faranch,P.tabulaeformis Carr.and P.elliottii Engelm.,based on the field measurement data of aboveground biomass and stem volumes from 1055 destructive sample trees across the country.We found that all three methods,including the one-and two-variable equations,could adequately estimate aboveground biomass with a mean prediction error less than 5%,except for Pinus yunnanensis which yielded an error of about 6%.The BCF method was slightly poorer than the biomass equation and the ISES methods.The average coefficients of determination（R^2） were 0.944,0.938 and 0.943 and the mean prediction errors were 4.26,4.49 and 4.29% for the biomass equation method,the BCF method and the ISES method,respectively.The ISES method was the best approach for estimating aboveground biomass,which not only had high accuracy but also could estimate stocking volumes simultaneously that was compatible with aboveground biomass.In addition,we found that it is possible to develop a species-invariant one-variable allometric model for estimating aboveground biomass of all the five coniferous species.The model had an exponent parameter of 7/3 and the intercept parameter a_0 could be estimated indirectly from stem basic density（a_0= 0.294 q）.

Foreign direct investment and environmental pollution:A fiscal decentralization perspective

Based on the panel data of 272 prefecture-level cities in China from 2003 to 2017,this study used the comprehensive index of environmental pollution to measure local environmental pollution,and employed the panel simultaneous equation to analyze the relationship between fiscal decentralization,foreign direct investment,and environmental pollution.The results showed that environmental pollution has the characteristics of time inertia and positive spatial spillover;fiscal decentralization and local government competition have a significant“race to bottom”effect on environmental pollution;and with the increase of fiscal decentralization,environmental quality will deteriorate.In the interaction between foreign direct investment and environmental pollution under the system of fiscal decentralization,foreign direct investment aggravates environmental pollution.Meanwhile,if the environmental pollution in a given region is serious,the willingness of foreign investors to invest therein is lessened to a certain extent.Based on the conditions in China,certain policy suggestions are put forward to increase environmental quality,such as building a comprehensive performance assessment mechanism that includes environmental quality,optimizing the decentralization system,and raising the threshold of foreign investment access.

Estimate on spillover effect of environmental pollution between peripheral areas

Interaction of environmental pollution between peripheral areas has become a central topic in the field of resources and environment but little is known about the actual impact on peripheral areas in the current literature.This paper sets out a simultaneous equation model to investigate the spillover effect of environmental pollution between China's peripheral areas utilizing the panel data of 218 cities in China.Making use of indicators for measuring the impact on environmental pollution,it identifies that environmental pollution between cities of China has a significant two-way spillover effect.After standardization of variables,it is found that the spillover effect of peripheral areas on urban environmental pollution cannot be neglected.Nearly,a third of the environmental pollution level in a city is induced by the environmental pollution in peripheral areas.If the indicator of environmental pollution in peripheral areas is missing,wrong conclusions will be drawn.Therefore,government should shift the emphasis of environmental regulation from local to global,and improve the overall environmental quality through coordinated management of regional environment.

An Analysis of Farming in the Rural Economic Development of West Virginia

Farming is still an important sector in rural economic development of West Virginia where 44% of the population lives in rural areas and 24% of the land is used for farming. While income earnings, education and employment rates are low in rural areas, poverty rates and unemployment are high compared to the urban areas. Thus, in the context of rural development farming is a potential major economic sector where 42% of the people＇s primary occupation is reported as farming. The objective of this study is to identify and estimate the potential impacts of farm employment in rural economic growth of West Virginia. Data from U.S. Bureau of Labor Statistics and U.S Census Bureau for the period of 1993 to 2008 are used for the empirical analysis. A model derived from the three simultaneous equations of Duncan is used for analysis. Three-Stage Least Squares （3SLS） method using the statistical package of STATA is used for estimation. The results concerning simultaneous relationships with population density growth, per capita income growth, and farm employment growth reveal significant importance of farming in rural economic development of West Virginia. Furthermore, the results indicate the positive impacts of population density, number of people with farming as principal occupation, and crop production on rural farming sector.

The simultaneity in human capital estimations： The case of China

Existing papers on human capital and growth in China has been using single equation estimations. This might cause a simultaneity bias if a two-way causality between the two variables exists. In this paper, the author performs vector autoregressive estimations using panel data on the number of graduates at each level of education as a proxy for human capital in China during 1991-2005. The results show that investment in human capital increases output per worker at all three levels of education. Regarding the effects of output per worker on the accumulation of human capital, the author finds mixed results with the primary-school graduates＇ benefits the most from increases in per capita output.

Short-Term and Long-Term Price Forecasting Models for the Future Exchange of Mongolian Natural Sea Buckthorn Market

Sea buckthorn market floated uncertainly within a narrow range. The market situation provided upward pressure on prices, and producer and consumer interest were poor, coupled with weak prices in the regional markets. The objectives of the study are: 1) to estimate the relationship between wild Sea buckthorn (SB) price and Supply, Demand, while some other factors of crude oil price and exchange rate by using simultaneous Supply-Demand and Price system equation and Vector Error Correction Method (VECM);2) to forecast the short-term and long-term SB price;3) to compare and evaluate the price forecasting models. Firstly, the data was analyzed by Ferris and Engle-Granger’s procedure;secondly, both price forecasting methodologies were tested by Pindyck-Rubinfeld and Makridakis’s procedure. The result shows that the VECM model is more efficient using yearly data;a short-term price forecast decreases, and a long-term price forecast is predicted to increase the Mongolian Sea buckthorn market.

Local Linear Estimation by TSLS with Variable Bandwidth for Semi-parametric Simultaneous Equation Models in Econometrics

Econometric simultaneous equation models play an important role in making economic policies, analyzing economic structure and economic forecasting. This paper presents local linear estimators by TSLS with variable bandwidth for every structural equation in semi-parametric simultaneous equation models in econometrics. The properties under large sample size were studied by using the asymptotic theory when all variables were random. The results show that the estimators of the parameters have consistency and asymptotic normality, and their convergence rates are equal to n^-1/2. And the estimator of the nonparametric function has the consistency and asymptotic normality in interior points and its rate of convergence is equal to the optimal convergence rate of the nonparametric function estimation.

Temperature and environmental degradation:an international evidence

Introduction:The effects of temperature have largely been under-examined in climate change studies.This study examines both direct and indirect effects of temperature on environmental degradation using the sample of 103 middle-income countries from 1985 to 2019.Unlike previous studies in which a single equation approach is utilized,our study considers the simultaneous equations modelling to examine the energy-growth-environment nexus incorporating temperature and corruption.The difference and system generalized method of moments estimations for panel data are used.Outcomes:Empirical results from this paper confirm both the direct and indirect effects(via energy consumption)of temperature on environmental degradation.We find corruption harms economic growth in middle-income countries.The continued use of fossil fuel energy in energy consumption deteriorates environmental quality.Our findings confirm the critical role of the services sector in supporting economic growth and reducing emerging consumption,leading to increased environmental quality.Conclusion:Findings from our study reconfirm the vital role of renewable energy and its extended use in achieving dual objectives of supporting economic growth and improving the environmental quality in middle-income countries.

Estimating Survival Treatment Effects with Covariate Adjustment Using Propensity Score

Propensity score is widely used to estimate treatment effects in observational studies.The covariate adjustment using propensity score is the most straightforward method in the literature of causal inference.In this article,we estimate the survival treatment effect with covariate adjustment using propensity score in the semiparametric accelerated failure time model.We establish the asymptotic properties of the proposed estimator by simultaneous estimating equations.We conduct simulation studies to evaluate the finite sample performance of the proposed method.A real data set from the German Breast Cancer Study Group is analyzed to illustrate the proposed method.

Scientific and Technological Innovation,Industrial Structure Upgrading,and High-Quality Economic Development

Scientific and technological(S&T)innovation and industrial structure upgrading have become two strategies to achieve high-quality economic development under the new pattern of development in China.Exploring the mechanism through which the former two affect the latter is of great significance to realize high-quality economic development and socialist modernization.Based on panel data of 30 provinces(municipalities,autonomous regions)from 2008 to 2017,this paper adopts the simultaneous equation model to empirically investigate the effect of S&T innovation and industrial structure upgrading on high-quality economic development.The study reveals that S&T innovation can significantly promote industrial structure upgrading and high-quality economic development,while industrial structure upgrading imposes a significantly negative effect on high-quality economic development.However,S&T innovation can offset such a negative effect and promote high-quality development indirectly.S&T innovation influences high-quality development in a dual path.To be specific,the former produces both a direct influence on the latter,but also an indirect influence through industrial structure upgrading.

Vertical Fiscal Imbalance,Transfer Payment and Local Government Governance

Accelerating the construction of modern fiscal and tax system helps not only free local governments from the shackle of the“competition for growth”development model,but also improve the governance capacity of local governments and realize the good governance of the country in the long term.Firstly,based on the typical fact of Chinese-style fiscal decentralization,this paper theoretically interprets the multiple channels and influencing mechanisms among vertical fiscal imbalance,transfer payment and local government governance.Secondly,it constructs a comprehensive index system to measure the governance capacity of local governments.The result shows that local government governance is relatively low in capacity and slow in improvement,and displays obvious regional heterogeneity.Then,the paper chooses structure and scale of transfer payment as mediator to construct the panel simultaneous equation model,and uses the three-stage least squares estimation(3SLS)for empirical investigation.The study finds that first,both the scale and structure of transfer payment may significantly affect local government governance,but the direction of the effects is opposite;second,the intensified vertical fiscal imbalance and the increase of transfer payment in scale can significantly inhibit local government governance,but the optimization of transfer payment in structure can significantly improve the governance;third,vertical fiscal imbalance not only directly inhibits the improvement of local government governance,but indirectly impedes it through the scale and structure of transfer payment.

Research for the Algorithm of Nonlinear Two Stage Least Squares Estimator

The implementation of parameter estimation is a serious problem in the modeling for nonlinear simultaneous equations.For the estimator of best nonlinear two stage least squares(BNL2SLS)that Amemiya proposed,the procedure of selecting matrix(W)of instrumental variables is presented, which is based on the calculation of alternating conditional expectation.The algorithm of BNL2SLS estimator is explored which is recommended by two steps,and its efficiency is confirmed in simulation study.It has bred prospects to apply the algorithm proposed in this paper in practice.