Table 3 Definition and sources of variables
From: Asymmetric threshold effects of digitization on inflation in emerging markets
Variable name | Definition | Abbreviation | Source |
|---|---|---|---|
Inflation | Percentage change in GDP deflator (base year varies by country) | inf | WDI (2021) |
Output gap | Following Hodrick and Prescott (1997) and Corbae and Ouliaris (2002), this variable is computed as the difference between Growth rate of real GDP per capita (constant 2000 US$) and the potential growth rate of real GDP per capita, where the latter is estimated using the trend component filtered using the Hodrick-Prescott (HP) filter on the GDP expressed in billions of constant 2010 US dollars | outgap | Authors’ computation based on data from WDI (2021) |
Inflation expectation | Author computation following Cebula (2015) using \({\pi }_{t}^{e}\) = \(\frac{3\bullet {\pi }_{t} + 2\bullet { \pi }_{t-1} + 1\bullet { \pi }_{t-2}}{6}\), as explained on Page 9 | inf_exp | Authors’ computation based on data from WDI (2021) |
Exchange rate | Real effective exchange rate index (2010 = 100) | exch | WDI (2021) |
Foreign direct investment | Foreign direct investment, net inflows (% of GDP) | fdi | WDI (2021) |
Oil | Pump price for gasoline (US$ per liter) | oil | WDI (2021) |
Digital ecosystem development index | Composite Index of the following eight pillars | digindex | Katz and Callorda (2018) |
Infrastructure of digital services index | Investments, quality of services, coverage, and service infrastructure of the digital ecosystem using 15 indicators such as average broadband download speed and number of satellites | infra | Katz and Callorda (2018) |
Digital connectivity index | Affordability, penetration, and ownership in the digital ecosystem using eleven indicators such as monthly fixed and penetration of computers and smartphone users | conn | Katz and Callorda (2018) |
Household digitization index | Internet use, E-government, E-commerce, and over the top media services (OTTs) using seven indicators that characterize the household digital ecosystem | dighou | Katz and Callorda (2018) |
Digitization of production index | Digital infrastructure, digital supply chain, digital distribution, and digital processing using six indicators that characterize the digital ecosystem of the enterprise sector | digprod | Katz and Callorda (2018) |
Digital industries index | Weight of digital industries, IoT, and content production using seven indicators such as high tech and ICT services exports, and Machine-to-Machine (M2M) connections | comp | Katz and Callorda (2018) |
Factors of digital production index | Human capital, schools, innovation, investment in innovation, and economic development in the digital ecosystem using eight indicators such as GDP per capita, and USPTO patents | eco | Katz and Callorda (2018) |
Digital Competitive Intensity Index | Level of competition using 4 indicators: the Herfindahl–Hirschman Index (HHI) fixed and mobile broadband, pay TV, and mobile telephony | fp | Katz and Callorda (2018) |
Regulatory framework and public policies index | Role of government in the digital ecosystem and cyber-security and piracy using four indicators such as % of regulatory agency attributions and % of non-licensed installed software | instr | Katz and Callorda (2018) |
Education | The principal component of the next three variables | edu | Authors’ computation |
Primary school enrollment | Primary education provides children with basic reading, writing, and mathematics skills along with an elementary understanding of such subjects as history, geography, natural science, social science, art, and music | schp | WDI (2021) |
Secondary school enrollment | Secondary education completes the provision of basic education that began at the primary level, and aims at laying the foundations for lifelong learning and human development, by offering more subject- or skill-oriented instruction using more specialized teachers | schs | WDI (2021) |
Tertiary school enrollment | Tertiary education, whether or not to an advanced research qualification, normally requires, as a minimum condition of admission, the successful completion of education at the secondary level | scht | WDI (2021) |
Governance | The principal component of the next six indicators | gov | Authors’ computation |
Control of corruption | Perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests | corrup | WDI (2021) |
Government Effectiveness | Perceptions of the quality such as public services, the quality of the civil service and the degree of its independence from political pressures | goveff | WDI (2021) |
Political stability and absence of violence/terrorism | Perceptions of the likelihood of political instability and/or politically-motivated violence, including terrorism | pols | WDI (2021) |
Regulatory quality | Perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development | regq | WDI (2021) |
Rule of law | Perceptions of the extent to which agents have confidence in and abide by the rules of society, and the likelihood of crime and violence | rl | WDI (2021) |
Voice and accountability | Perceptions of the extent to which a country's citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media | vacc | WDI (2021) |