Nutrition and economic growth in South Africa: a threshold co-integration approach
In: Journal of economic studies, Band 42, Heft 1, S. 138-156
ISSN: 1758-7387
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In: Journal of economic studies, Band 42, Heft 1, S. 138-156
ISSN: 1758-7387
In: Millennial Asia: an international journal of Asian studies
ISSN: 2321-7081
The primary focus of this study is to examine the long-term and short-term impact of fiscal deficit (FD) on the current account deficit (CAD) in India over the period of 1980 to 2021 in the presence of inflation and exchange rate. For the estimation of data series, the study employed autoregressive distributed lag (ARDL) co-integration test and Gregory Hansen (GH) co-integration test with endogenous structural break. The empirical results from ARDL bounds tests fail to provide a long-run relationship for the variables. The threshold co-integration test (GH) estimation suggests a strong evidence of a co-integration relationship for the variables and the break year is found in 2005. Thus, the findings validate the twin deficit hypothesis in the long-run as the FD has a positive significant effect on a CAD in India. Similarly, the long-run estimates of inflation have a positive significant effect on the CAD. It implies that an increase in rate of inflation distorts the CAD in the long-run. Consequently, the government of India should control the price hike and make macroeconomic situations favourable for domestic tradable sectors. The results from the Granger causality technique show bidirectional causality between FD and CAD implies the twin deficit in India. Based on the empirical findings, it may be argued that the Central Bank of India should try to reduce the prolonged CADs and retain stability in the domestic currency.
SSRN
Working paper
The purpose of foreign aid is to stimulate economic growth in aid-recipient countries; yet, literature review reveals mixed results: inconclusive or often controversial findings. By using time series annual data from 1991 to 2012, and applying Johansen's multivariate co-integration test with vector error correction model (VECM) and the innovative accounting (variance decomposition and impulse response function analysis) techniques, this study aims to examine the long run and short run impact of foreign aid on Cambodia's aid-dependent economy; two other variables such as inflation, and government consumption expenditure are also included in the model. The results of the model show that foreign aid has a significantly positive impact on economic growth in the long run in Cambodia. In addition, foreign aid also has an influence on inflation and may cause it to rise in the short run and in the long run. The model also confirms that foreign aid and inflation positively affect government expenditure in the long run.
BASE
In: International journal of academic research in business and social sciences: IJ-ARBSS, Band 5, Heft 1
ISSN: 2222-6990
This paper investigates the impacts of money supply, government expenditure, velocity, industry value addition and economic growth on inflation of Bangladesh using time series data from 1978-2014. The ADF test results suggest that the variables are of I(1). It is found that there exist five co-integration equations. The outcome of the Granger Causality test suggests the short-run unidirectional causality running from industrial value addition to money supply, from inflation, money supply, velocity, industrial value addition and economic growth to government spending. Bidirectional causality has been found between economic growth and industrial value addition. Finally, short-run and long-run effects of money supply, government spending, velocity, industry value addition and economic growth on inflation are estimated. It is found that the speed of adjustment for short-run to approach to the long-run equilibrium level is significant at any significance level. It has been found that it will take about 1.25 years for a complete convergence process to approach its equilibrium. Therefore, in case of any shock to the inflation equation, the speed of adjustment is significantly faster. It has also been found that the long-run effects of money supply and velocity have positive significant effects while the economic growth has significant negative effect on inflation in Bangladesh economy. It has been found that the long-run effects of money supply and velocity are more than short-run effects meaning that over the time more money supply and velocity increase the more and more inflation in Bangladesh but economic growth decreases the inflation.
BASE
SSRN
Working paper
In: Panoeconomicus: naučno-stručni časopis Saveza Ekonomista Vojvodine ; scientific-professional journal of Economists' Association of Vojvodina, Band 55, Heft 3, S. 309-324
ISSN: 2217-2386
This article studies the international integration of the national stock markets of sixteen European countries. The international financial market is represented by two indices: a European index and a World index. The methodology of co-integration, used in this article, is the proper econometrical solution for the treatment of non-stationary series as those used in the present research. Complementarily, co-integration offers the possibility of distinguishing the long-term and the short-term interdependence, which very important when the variables are financial market indices. The empirical tests in this research have shown that both European and non European international factors are necessary to explain the international integration of the national stock markets under analysis. .
In: Advanced texts in econometrics
SSRN
This study empirically investigates the relevance of Traditional Trade Theory, New Trade Theory and New Economic Geography in explaining industrial and services sectors' agglomeration in the European Union. Therefore, new dynamic panel data estimation techniques will be employed. Static panel data analysis reveals that assumptions of New Trade Theory and New Economic Geography can explain industrial concentration in the EU best. Results from dynamic panel OLS show that intermediate goods' intensity and therewith New Economic Geography's assumptions are important in explaining both industrial and services sectors' agglomeration. Several non-stationarity and co-integration relationships can be detected. Further, decomposition of effects across and within sectors is provided. Scale economies are only important for across industries' variation in agglomeration, not within. For services sectors' agglomeration results show that intermediate goods intensity matters only for within and not across industries' variation in agglomeration. Further evidence for intrasectoral trade explaining equalizing economic structures for services sectors is given.
BASE
In: Panoeconomicus: naučno-stručni časopis Saveza Ekonomista Vojvodine ; scientific-professional journal of Economists' Association of Vojvodina, Band 68, Heft 3, S. 359-374
ISSN: 2217-2386
From 2005 to 2008, high volatility in the markets affected grain prices significantly. This high volatility in grain prices made many researchers curious, and many discussions aroused from this topic. This study analyzes wheat price behavior during this period of high volatility. We estimate a return index for wheat using spot and futures wheat prices with the help of a present value model. To analyze the cointegration between the wheat prices and return index, a new cointegration test with multiple structural breaks, developed by Daiki Maki (2012), is used. The long-run cointegration coefficients are estimated using the Dynamic Ordinary Least Squares methodology. The empirical results show that there is cointegration between the spot and futures wheat prices, which tends to change at breakpoints. In other words, there is an equilibrium relation between spot prices and futures prices; however, it becomes unstable during the crisis in 2008. The results may help in understanding the dynamics of wheat prices, especially during high-volatility periods.
In: Society and economy: journal of the Corvinus University of Budapest, Band 42, Heft 3, S. 313-332
ISSN: 1588-970X
Abstract
Although Ethiopia is one of the Heavily Indebted Poor Countries (HIPC), there is a lack of empirical studies about the determinants of its external indebtedness. This paper aims to fill this gap by examining the macroeconomic determinants of the external indebtedness of Ethiopia between 1981 and 2016, using the two- and three-gap models as a theoretical framework and an autoregressive distributed lag bound testing approach. The result shows that in the long run, the savings-investment gap, trade deficit, fiscal deficit, and debt service have a positive and significant impact on external indebtedness. However, the growth rate of gross domestic product, trade openness, and inflation negatively and significantly affect the external indebtedness of the country. These results coincide with the predictions of the two- and three-gap models of the theoretical framework. The study argues that appropriate macroeconomic, social, and supply-side policies are essential to reducing the external indebtedness of Ethiopia.
In: The Pakistan development review: PDR, Band 34, Heft 4III, S. 1001-1012
The relationship between export expansion and economic growth
has been examined extensively during the last two decades in the context
of the suitability of the alternative development strategies. The decade
of the 1970s witnessed an emerging consensus in favour of export
promotion as development strategy. Such a consensus was based on the
following facts. First, higher export earnings working through
alleviating foreign exchange constraints may enhance the ability of a
developing country to import more industrial raw materials and capital
goods, which, in turn, may expand its productive capacity. Secondly, the
competition in export markets abroad may lead to the exploitation of
economies of scale, greater capacity utilisation, efficient resource
allocation, and an acceleration of technical progress in production.
Thirdly, given the theoretical arguments mentioned above, the observed
strong correlation between exports and economic growth was interpreted
as empirical evidence in favour of export promotion as a development
strategy. The empirical evidence in favour of export promotion rests on
the general approach where real growth is regressed on contemporaneous
real export, growth and the significance of the export growth
coefficient supports the proposition that export growth causes output
growth. Balassa (1978); Feder (1982); Fosu (1990); Kavoussi (1984);
Tyler (1981) and Ram (1985) have followed such an approach.1 Khan and
Saqib (1993), on the other hand, examined the relationship between
exports and economic growth by constructing a simultaneous equation
model comprising equations for exports and economic growth. They found a
strong association between export performance and GDP growth for
Pakistan, and that more than 90 percent of the contribution of exports
on economic growth was indirect in nature.
In: The Economic Journal, Band 106, Heft 439, S. 1813