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Incrementalism as a decision theory about budget‐making is empirically evaluated by post‐war data within the framework of budget‐making processes of some Swedish public authorities. The analysis focuses on the relevance of a structural stability hypothesis using models for the processes of budget requests and appropriations. This hypothesis is tested by CUSUM and CUSUMQ tests. The more powerful CUSUMQ test clearly indicates a rejection of the stability assumption, which implies a need for revised models based on variability assumptions. These alternative models describing budget‐making processes are estimated by Kalman filtering, an estimation approach designed to allow for structural variability. The paper shows that the key decision principles of incrementalism are too crude for the understanding of budget decisions.

Owing to the continuous increase in the volume of remittances inflow to Nigeria and the seeming synergy between capital market and economic growth, this study examines the role of remittances in fostering sustainability of the Nigeria capital market for the period 1981 to 2020. The study used Auto-Regressive Distributed Lag (ARDL) modeling approach to co-integration analysis and based on relevant theory, the model was estimated. Estimates showed that remittances significantly and positively impact capital market in the long run. The result also shows that the capital market adjusts speedily to the tune of 64 percent towards convergence in any displacement. Other diagnostics analyses conducted, such as the causality test, affirmed the existence of unidirectional causality running from remittances to the capital market. CUSUM and CUSUMQ tests attest to the stability of the model, which makes it amenable for policy prediction. The findings bring the policy implications and recommendations to the fore.

The purpose of this study was to estimate the influence of health on per capita GDP in Indonesia in 1986-2018. Health was proxied by three variables including health expenditure, infant mortality rate and life expectancy. The variables expressed a significant indicator to assess health level in a country. Furthermore, the estimation was carried out in the short-run and long-run based on the ARDL-ECM model. The results showed that the feasible ARDL model was ARDL (2, 0, 0, 0). In long-run, per capita GDP was significantly influenced by health expenditure, infant mortality rate and life expectancy. This expressed significant implication of the health level for increasing the economic performance and welfare in Indonesia. Meanwhile, in short-run, it was only influenced by infant mortality rate and (ECT (-1)). Further, Cusum and CusumQ tests showed the empirical model was stable. The policy implication directs that the government can improve the quality of public health, increase health expenditure as a fiscal stimulus, and support increasing public income.

The purpose of this study was to estimate the influence of health on per capita GDP in Indonesia in 1986-2018. Health was proxied by three variables including health expenditure, infant mortality rate and life expectancy. The variables expressed a significant indicator to assess health level in a country. Furthermore, the estimation was carried out in the short-run and long-run based on the ARDL-ECM model. The results showed that the feasible ARDL model was ARDL (2, 0, 0, 0). In long-run, per capita GDP was significantly influenced by health expenditure, infant mortality rate and life expectancy. This expressed significant implication of the health level for increasing the economic performance and welfare in Indonesia. Meanwhile, in short-run, it was only influenced by infant mortality rate and (ECT (-1)). Further, Cusum and CusumQ tests showed the empirical model was stable. The policy implication directs that the government can improve the quality of public health, increase health expenditure as a fiscal stimulus, and support increasing public income.

Financial repression introduced early decade 1970 by McKinnon (1988) and Shaw (1973) that represented limits created by governments on monetary and financial system and had a negative impact on financial markets but in some countries, financial repression has had a positive effect on the financial markets. Iran is among the countries that knows necessary suppression of the financing for the economy and of decade 1350 until now is applied many restrictions on the financial markets. In this article we use the econometric methodology "regression to the wide distribution breaks» (ARDL) are paid to analyze the relationship between financial depth and financial suppression of in India for the period 1976-2006 the result of this research has been the negative impact of financial suppression of on financial depth variable and if the government does not limit the financial markets, increased financial depth and can be useful for the economy. Due to error correction model (ECM) we confirm long-term relationship between variables and using the test (CUSUM, CUSUMQ), lack of structural failure in the model.

Purpose
This study aims to explore the short-run and long-run relationships and causality between economic growth and financialization in the new member states (NMS-11) and to provide some policy implications drawn from the empirical findings.


Design/methodology/approach
The autoregressive distributed lag (ARDL) bounds test approach to cointegration with the vector error correction model and the cumulative sum of squares (CUSUMQ) test for stability of functions is used between 1995q1 and 2021q4 to examine the existence of cointegration, relationships and causality between economic growth and financialization.


Findings
The findings of the ARDL bounds test demonstrate that the variables included in the models are bound together in the long run, as confirmed by the associated equilibrium correction. The estimated models indicate that the association between selected variables and economic growth is stronger and more statistically significant in the short run compared with the long run. Also, for NMS-11 understudied countries, short-run causality prevails over long-run causality. The changes in the level of financialization have a significant negative effect on the growth rates in the short run, which aligns with findings from previous empirical studies.


Originality/value
This study extends the existing very limited literature about short-run and long-run relationships and causality among economic growth and financialization, including inflation and unemployment variables, to determine their link in the NMS-11. Specifically, the present study reveals that the current level of financialization hampers economic growth and promoting such economic policies further can have adverse effects on the overall economic growth.

PurposeHigher education has a vital role to play in shaping the way in which future generations learn to cope with the complexities of sustainable development. Universities and higher education institutions educate highly qualified graduates and responsible citizens able to meet the needs of all sectors of human activity; they provide opportunities for higher learning and for learning throughout life; they advance, create and disseminate knowledge through research and provide, as part of their service to the community, relevant expertise to assist societies in cultural, social and economic development; they contribute to the development and improvement of education at all levels, including through the training of teachers. The objective of this study is to examine the relationship between higher education and economic growth in Iran.Design/methodology/approachFirst, a baseline survey analysis of Iran supported by tables and figures was conducted. Secondly, by using multivariable time series data on the variables: annual logarithmic gross domestic product, physical capital (K), human capital, research expenditures (R) and by using an autoregressive distributed lag (ARDL) model, the long‐ and short‐run relationship between the growth and higher education variable was investigated. The following steps were followed: test of a dynamic ARDL model, CUSUM and CUSUMQ test for stability, long‐run relationship and ECM test.FindingsThe results indicated that the higher education variable had a positive effect on the economic growth of Iran in both the short and long run.Originality/valueThe research in this paper has implications for government policy makers responsible for investment in higher education.

Purpose– The aim of this study is to investigate the validity of the Kaldor-Verdoorn's law in explaining the long-run determinants of the labor productivity growth for the manufacturing sector of some developed economies (Western European Countries, Australia, Canada, Japan and the USA).Design/methodology/approach– The authors consider the period 1973-2006 using data provided by the European Commission – Economics and Financial Affairs. The method is instrumental variable. The robustness of estimates is checked by means of the Chow and the CUSUM and CUSUMQ tests. The authors consider the traditional specification of the dynamic Verdoorn law and the one which also includes investment to output ratio (I/Y), as a proxy of the capital growth rate, and the average labor cost growth, as a proxy of supply factors.Findings– The findings suggest that the law is valid for the manufacturing as countries show increasing returns to scale. Capital growth and labor cost growth do not appear important in explaining productivity growth. The estimated Verdoorn coefficients are found to be substantially stable throughout the period.Originality/value– The authors consider the most recent years, which has been characterized by a constant decline in the average GDP growth rates; a productivity growth decline; the long-term reduction in the manufacturing share of total employment. The authors examine the importance of alternative hypotheses such as those related to the existence of supply constraints. The authors check the stability of the KVL throughout the period under the consideration and across countries. The authors evaluate whether, in the case of the developed countries, economies of scale are significant.

Abstract. This empirical study followed time varying parametric approach (Kalman Filter) and auto regression distributed lag (ARDL) with general to specific approach to find out relevant macroeconomic determinants of Pakistan's services sector's growth. To our best of knowledge, no author has made such study that employed these estimation techniques to find out determinants of services sector growth in Pakistan while employing general to specific approach. Current study bridges this gap. Annual data was taken from World Development Indicators (2014) during period 1976-2014. Main findings of the study are that rolling regression estimates of explanatory variables justify the use of Kalman filtering approach. Results show that inflation has negative effect on services sector output growth in case of TVP approach. This result does match with ARDL results. Net foreign direct investment has positive and significant effect on services sector output growth in both techniques of estimation. Gross national expenditures with positive effect are the relevant significant determinants of services sector output growth at five percent significance level in case of TVP approach while relationship was insignificant in case of ARDL estimation. Impact of remittances received on services sector growth is negative in case of time varying parametric approach. This result is different from ARDL results where relationship is positive and significant at five percent level of significance. All the one step ahead state vectors confirmed the stability of models in case of time varying parametric approach. Cumulative sum of recursive residuals (CUSUM) and cumulative sum of recursive residuals square (CUSUMQ) also confirmed the stability of results of auto regression distributed lag. Based on these empirical findings, we conclude that government should focus on service sector growth augmenting factors while formulating any policy relevant to the concerned sector. Keywords. Services sector, Kalman filter, Rolling regression.JEL. C22, O11, O40.

The aim of the study is to empirically test the demand for money function in South Africa's inflation-targeting era. This came from the fact that there have been a number of structural changes in the South African economy that have appeared to alter the relation between M3 and GDP and other macroeconomic variables. The study employed co-integration tests that showed one co-integrating equation which led to the application of the Vector-Error Correction Model (VECM) using the quarterly time series data covering the period from 2000-2015. The demand for money is investigated by estimating the real money balances as a function of Treasury Bills rate, income and total credit. Results showed that there is a negative relationship among Treasury Bills rate, income and real money balances. However, there is a positive relationship between real money balances and the total credit provided by the banking sector. The CUSUM and CUSUMQ tests are applied to examine the possibility of structural breaks in money demand functions, as well as parameter stability. The results of the study indicated that the estimated parameters for the short and long run dynamics of the real money demand function are stable. It was evident that Treasury bill rate, income and total credit can explain money balances and therefore can influence demand for money. The study recommends that the government ensures that there are economic activities such as employment creation which can then boost income levels so as to get a positive relationship between money balances and income. Through employment creation, there can be a reduction in borrowing. Treasury bill rates, being an effective monetary policy tool, can be used to direct monetary policy and also promote price stability. The study recommends that the South African Reserve Bank continue to improve the conditions in the financial sector. In this regard, the SARB and the government should strive to enact flexible policies that will boost financial credit and uplift business confidence. ; Thesis (MCom)(Economics) -- University of Fort Hare, 2016