Person:
Lartey, Emmanuel
Author Name Variants
Fields of Specialization
International macroeconomics,
Monetary economics,
Development economics
Degrees
ORCID
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Externally Hosted Work
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Last updated
January 31, 2023
Biography
Emmanuel K. K. Lartey is a professor of economics at California State University, Fullerton. He has also worked as an economist in the Office of the Chief Economist for the Africa Region at the World Bank. His research focuses on policy-relevant issues in international macroeconomics in the context of developing economies and covers manufacturing productivity and global value chains. He holds a PhD in economics from Boston College and possesses an extensive publication record.
Publication Search Results
1 - 9 of 9
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Remittances and the Dutch Disease
( 2009)Using data for El Salvador and Bayesian techniques, we develop and estimate a two-sector dynamic stochastic general equilibrium model to analyze the effects of remittances on emerging market economies. We find that, whether altruistically motivated or otherwise, an increase in remittance flows leads to a decline in labor supply and an increase in consumption demand that is biased toward non-tradables. The higher non-tradable prices serve as incentive for an expansion of that sector, culminating in reallocation of labor away from the tradable sector--a phenomenon known as the Dutch disease. Quantitative results also indicate that remittances improve the welfare of households because they smooth income flows and increase consumption and leisure levels. A BVAR analysis provides results that are consistent with the dynamics of the model. -
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Sudden Surges and Macroprudential Policies
(Taylor and Francis, 2020-02-21)This paper estimates the unconditional probability of a sudden surge in private credit and investigates the extent to which macroprudential policies impact the duration of the period preceding such a surge. While we observe sudden surges of credit over periods in which macroprudential policies were enacted, we document that these policies were effective at lowering the probability of credit booms between 2000 and 2013. -
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Market Size, Sunk Costs of Entry, and Transport Costs: An Empirical Evaluation of the Impact of Demand-Side Factors versus Supply-Side Factors on Manufacturing Productivity
(World Bank, Washington, DC, 2019-06)This paper uses plant-level, panel data from the Ethiopian manufacturing census to estimate the effects of demand-side and supply-side factors on industrywide aggregate productivity. The paper focuses on the effects of three factors: (1) local market size, (2) the value of transportation costs that firms incur in selling to customers outside their market, and (3) licensing fees needed to enter the market. Identification is based on a model of production under monopolistic competition, which enables interpreting the estimated coefficients of a reduced form, dynamic productivity equation. The paper analyzes 11 industries in Ethiopia over 2000 to 2010. Several interesting results emerge. In the most parsimonious specification, the estimated coefficients are consistent with all three predictions of the model—but only for one industry: cinder blocks. In this industry, the expansion of the local market boosts industrywide total factor revenue productivity, while increases in transport costs and licensing fees reduce it. The picture is somewhat mixed in the other 10 industries but broadly consistent with the predictions of the model. -
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Africa in Manufacturing Global Value Chains: Cross-Country Patterns in the Dynamics of Linkages
(World Bank, Washington, DC, 2020-10)Africa's linkages in manufacturing global value chains are reasonably high compared with other developing regions. Still, linkage rates have declined steeply in recent years in non-resource rich countries in the region although they have increased sharply in countries that are rich in natural resources. Moreover, the level and dynamics of linkages to manufacturing global value chains vary significantly between countries within each group of natural resource endowments. The current levels, activity structure, and geographic configuration of linkage rates evolved over the past 20 years. In addition, these linkages cut across broad activity categories, including manufacturing textiles and apparel, metal products, transport equipment, and electrical goods. This paper analyzes the sources of the variation in linkage rates in the framework of an estimated gravity and linear probability model. It is shown that the domestic actors in these linkages are typically relatively large establishments (100 or more employees) and have been in operation for five years or longer. These manufacturers are also more likely to have foreign equity holders or foreign technology licenses. These findings should be seen in the light of policies that promote industrialization by facilitating integration into manufacturing global value chains at links that maximize job and productivity gains. -
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Financial Development, Exchange Rate Regimes, and Growth Dynamics
(World Bank, Washington, DC, 2018-08)This paper utilizes data for African countries to analyze the extent to which financial development affects the dynamics of the relationship between exchange rate flexibility and economic growth. The findings indicate that financial development exerts a positive influence on the relationship between exchange rate flexibility and GDP growth as well as total factor productivity growth. The paper also documents a positive impact of trade openness on the relationship between exchange rate flexibility and growth. Moreover, the results show a strong and positive association between exchange rate flexibility and financial development. The findings, therefore, suggest that discussions and decisions on exchange rate policy should be undertaken with consideration for structural policies that address the development of the financial sector. In addition, the paper asserts that policy makers should adopt a stance that facilitates some flexibility in exchange rates to foster development of the financial infrastructure in these economies. -
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Exchange Rate Flexibility and the Effect of Remittances on Economic Growth
(World Bank, Washington, DC, 2016-12)This paper studies the question of whether exchange rate policy affects the impact of remittances on economic growth in recipient countries. The paper utilizes a comprehensive data set that comprises annual observations for 135 developing and transition countries, spanning 1970-2007. The data for exchange rate regimes is based on the Reinhart and Rogoff exchange rate regime classification, whereas the data for remittances and all other variables are from the World Bank's World Development Indicators database. The findings indicate that more flexible exchange rate regimes are associated with a greater increase in economic growth following an increase in remittances, but also that the impact of remittances on growth is positive under a fixed exchange rate regime. The estimates suggest that a 1 percent increase in remittances increases per capita growth by about 0.79 percent under a fixed exchange rate regime, and that this effect increases by about 0.13 percent for a 1 point increase in the exchange rate flexibility index. The results further suggest that the effect of remittances under a fixed exchange rate regime is positive in less financially developed countries as well, but do not provide conclusive evidence that this effect varies inversely with exchange rate flexibility in such economies as theorized. -
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The Effect of Remittances on the Current Account in Developing and Emerging Economies
(World Bank, Washington, DC, 2018-06)This paper presents an analysis of the effect of remittances on the current account in developing and emerging economies, incorporating an assessment of the extent to which exchange rate regimes impact the relationship. The main findings suggest there is a positive effect of remittances on the current account contemporaneously, but that the lagged effect is negative, which could be indicative of the existence of some underlying mechanisms characteristic of the Dutch disease phenomenon. In addition, the results show that a more flexible exchange regime dampens the contemporaneous positive effect that remittances have on the current account. The paper, therefore, asserts that policy makers face trade-offs pertaining to the use of exchange rate policy in managing the effects of remittances on the current account, which should be given due consideration when such policy choices are made. -
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Industrialization in Sub-Saharan Africa: Seizing Opportunities in Global Value Chains
(Washington, DC: World Bank, 2021-11-23)Industrialization drives the sustained growth in jobs and productivity that marks the developmental take-off of most developed economies. Yet, academics and policy makers have questioned the role of manufacturing in development for late industrializers, especially in view of rapid advancements in technologies and restructuring of international trade. Concurrently, industrialization and structural transformation are integral to the African Union’s Agenda 2063 and the development strategies of several countries in Sub-Saharan Africa (SSA). Given this renewed interest in industrialization across the region, a central question is not whether SSA countries should pursue industrialization as a potential path to sustainable growth but how to promote the prospects of industrialization. Industrialization in Sub-Saharan Africa: Seizing Opportunities in Global Value Chains addresses this question by reassessing the prospects for industrialization in SSA countries through integration into global value chains. It also examines the role of policy in enhancing these prospects. The main findings indicate that • SSA has not experienced premature deindustrialization; the region has witnessed substantial growth in manufacturing jobs despite a lack of improvement in the contribution of manufacturing value-added to GDP. • The region’s integration into manufacturing global value chains is reasonably high but it is dominated by exports of primary products and engagement in low-skill tasks. • Global value chain integration has led to job growth, and backward integration is associated with more job creation. The report emphasizes the role of policy in maintaining a competitive market environment, promoting productivity growth, and investing in skills development and enabling sectors such as infrastructure and finance. Policy makers can strengthen the global value chain linkages by (1) increasing the value-added content of current exports, (2) upgrading into high-skill tasks, and (3) creating comparative advantages in knowledge-intensive industries. -
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Sources of Manufacturing Productivity Growth in Africa
(World Bank, Washington, DC, 2019-08)This paper investigates the sources of growth in manufacturing productivity in Cote D’Ivoire, Ethiopia and Tanzania in comparison with the case of Bangladesh. Based on the analysis of establishment census data since the mid-1990s, it finds that reallocation of market share between firms contributed substantially to productivity growth in each of the four countries, although to a varying extent. In Ethiopia, the impact of market share reallocations among survivors tended to be larger than those associated with increases in within-plant productivity. In addition, plant closure (or exit) boosted productivity more than new plant openings (or entry) did in the sense that the relative productivity of survivors (or continuing plants) was higher relative to that of closing plants (or exit cases) than it was relative to the productivity of newly opening plants (or new entrants). Reallocation of market share plays an important role in raising aggregate productivity in Côte d’Ivoire as well. But the pattern here is opposite to that in Ethiopia in that in Côte d’Ivoire entering (or newly opening) plants have larger impact on aggregate productivity growth than closing (or exiting) plants. Unlike the case with Cote D’Ivoire and of Ethiopia, the reallocation of market share among surviving plants is a smaller source of manufacturing productivity growth in Tanzania than the new plant openings and plant closure. The data suggest that the reallocation of market share among surviving plants and exiting plants has larger impact on productivity growth in Bangladesh than the productivity gap between new plants and survivors, as in the case of Ethiopia.