Suchergebnisse

Potato sector is one of the competitive areas of the European Union (EU) agriculture. Although Eurostat declared that in 2015 Lithuanian share in the EU-28 harvested production was modest and composed only 0.7%, according to Food and Agriculture Organization of the United Nations (FAOSTAT), this crop remained on the list of top 10 commodities by net production value in Lithuanian agriculture. However, over the past decades the Lithuanian potato sector survived undesired transformations. The aim of this paper is to analyse the changes of the main indicators, related to the potato sector, and vertical price transmission among the chain of potatoes in Lithuania. The conducted research indicates the most important development trends of the potato sector and applies econometric techniques to investigate if there is any long-run relationship between the farm and retail prices of potatoes for the period of 2010 to 2016. Although the statistics show the shrinking production and domestic consumption of potatoes in Lithuania, the analysis of the vertical price transmission does not provide evidence of market inefficiencies. The Johansen cointegration test confirms the existence of a long-run relationship between the farm and retail prices, while the Granger causality test shows that there is a bidirectional causality between the examined series. The M-TAR model does not provide evidence of the farm and retail price asymmetry in the long run

Potato sector is one of the competitive areas of the European Union (EU) agriculture. Although Eurostat declared that in 2015 Lithuanian share in the EU-28 harvested production was modest and composed only 0.7%, according to Food and Agriculture Organization of the United Nations (FAOSTAT), this crop remained on the list of top 10 commodities by net production value in Lithuanian agriculture. However, over the past decades the Lithuanian potato sector survived undesired transformations. The aim of this paper is to analyse the changes of the main indicators, related to the potato sector, and vertical price transmission among the chain of potatoes in Lithuania. The conducted research indicates the most important development trends of the potato sector and applies econometric techniques to investigate if there is any long-run relationship between the farm and retail prices of potatoes for the period of 2010 to 2016. Although the statistics show the shrinking production and domestic consumption of potatoes in Lithuania, the analysis of the vertical price transmission does not provide evidence of market inefficiencies. The Johansen cointegration test confirms the existence of a long-run relationship between the farm and retail prices, while the Granger causality test shows that there is a bidirectional causality between the examined series. The M-TAR model does not provide evidence of the farm and retail price asymmetry in the long run

One of the most controversial issues in public finance and macroeconomics is the nature of the relationship between government spending and revenues. The debate between economists and politicians has been emphasised recently because of the increased budget deficits and defaults in many developed and developing countries. Many economists (Friedman, 1978; Payne, 1997; Darrat, 1998; Albatel, 2002) argued that it is very important to investigate whether the government spending determines the revenues and/or whether government revenue determines the government spending. We are applying an empirical analysis of the spend-tax or tax-spend hypothesis, in order to identify the direction of the causality between government spending and revenues in Greece for the period 1833-2009, a period of industrialisation, urbanisation, increased growth, increased government spending, and enormous budget deficits during the last decades and a serious problem with the public debt. In order to investigate the relationship between government revenues and spending we used the Dickey and Fuller (1979) and Phillips and Perron (1988) unit root tests, the Chow (1960) test and Zivot and Andrews (1992) unit root tests which allow structural changes, the Johansen (1988) cointegration approach and finally the Granger (1969) causality tests. We found strong evidence of long-run relationship between government spending and revenues. Additionally, we used the Granger-causality test which indicates that the causality runs from spending to revenues, thus support of the spend-tax hypothesis. The spend-tax hypothesis maintains that a political system somehow determines how much to spend and then makes the adjustments in tax policy and revenue sources in order to finance the government spending so limitations in spending will be effective for the economy of Greece, but no one could argue that limitations of taxation will be ineffective. It is very important for Greek government to identify the causal direction between government spending and tax revenues, because the direction of causality provides useful insights into how the country can manage their unsustainable budget deficits in the future.

Abstract. One of the most important reasons that led Greece to the current macroeconomic instability is the high military spending during the last decades. Thus, it is necessary to examine the impact of military spending on economic growth for the case of Greece. Furthermore, it will be very useful to examine the arms race hypothesis between Greece and Turkey in order to identify if there is an interaction between these countries that leads to the high level of military spending. In this paper we empirically test the relationship between military spending and economic growth for Greece and Turkey during 1957-2013, and examine the validity of arms race hypothesis between the two countries. We deployed unit root tests, unit root tests with structural changes, cointegration techniques and finally Granger causality tests. Granger causality tests in the case of Greece and Turkey imply that the causality runs from military spending to economic growth, however we find that there is no evidence of causality between Greek and Turkish military spending, which mean that that these countries act independently.Keywords. National Government Expenditures, National Security and War, Arms race, Greece, Turkey, Economic Growth, ADF, VAR.JEL. H5, H56, O40, E62.

Abstract. In the last twenty years many developed countries have faced significant public deficits, while the ability of government authorities to deal with public deficits has been receiving rising awareness from economists and policy makers. This is an imperative topic, in provisions of economics and public policy, and it is a central subject for the EMU area; hence, they are the main motivations of this paper. Theoretically, equilibrium growth paths have to be supported by adequate fiscal policy. The risk of a default on Greek sovereign debt during the last years has worried the Euro into its first serious crisis and raised the issue of debt sustainability in Europe. There is no universally accepted definition for sustainable fiscal policy. However, economists agree that expanding public debt is not sustainable. Budget policy is constrained by the need to finance the deficit. In this paper we provide a synthesis of empirical research in the validity of the Sustainability of Fiscal Policy of the existing literature for the period 1986-2012. These studies used both time series and panel data sets and empirically examined the Sustainability of fiscal policy for a single country and for a group of countries (multi-country studies). Furthermore, there are studies using data on government expenditure at the provincial or state level. Existing studies in this topic vary in the country selection. They used data for developed, developing countries or group of both, while most of them examined developed or industrial countries. All these studies found different empirical results: support, no support or mixed results.Keywords. Fiscal policy sustainability; Budget deficits; Government debt; cointegration; structural breaks.JEL. E62, H62, H63.

Abstract. The role of Fiscal policy in the long run growth process has been crucial in macroeconomics since the appearance of endogenous growth models. Additionally, a significant debate among economists involves whether several types of spending or taxation enhance economic growth. The main objective of this paper is to highlight the relationship between fiscal policy and economic growth in the EU-15, and make an attempt to determine which of the fiscal policy instruments enhance economic growth.We deployed panel data techniques and included both sides of budget, spending and taxation, in our regressions and used the most recent dataset data for fiscal variables from Eurostat. We made a new classification of public expenditures into homogeneous groups in order to reduce the explanatory variables and increase the efficiency of our model and results since we have data for only 14 years. In our empirical analysis we included OLS, fixed effects models, random effects models and GMM estimators, the Arellano and Bond (1991) and the Arellano and Bover (1995) - Blundell and Bond (1998) estimators.On the first round of our regressions we find a negative impact of spending on human capital accumulation on economic growth. Our empirical results also indicate that an increase on government spending on infrastructure has a significant positive impact on the economy growth of a country. Additionally, in our regressions the variable government spending on property rights protections include spending on defence and spending on public order safety. Our empirical results from the first round of regressions imply a strongly negative relationship between these two variables. However, on the second round of our regressions we aggregate defence spending from spending on property right protection and we did not find any relationship between economic growth and defence spending. Moreover, we found a non-significant relationship between government spending on social protection and economic growth. On the second round of regressions, when we allow for non-linear growth effects we find a positive relationship with deficits and economic growth, which is in contrast with Ricardian Equivalence. We also included the employment growth and business investment in our model because labour and capital are very important factors of production in growth models. In our empirical results we do not find a significant impact of employment on economic growth, but when we allow for non-linear growth effects we find a strongly positive impact. However, we found that gross fixed capital formation of the private sector as a percentage of GDP in both rounds of our regressions, has no significant impact on economic growth. Finally,our empirical results do not support any evidence of relationship between openness and economic growth.Keywords. Panel Data. Fiscal Policy. Taxation. Government Expenditures.JEL. C23, C33, E62, H2, H5.

PurposeOne of the main theories regarding the relationship between government expenditure and gross domestic product (GDP) is Wagner's law. This law was developed in the late-19th century by Adolph Wagner (1835–1917), a prominent German economist, and depicts that an increase in government expenditure is a feature often associated with progressive states. This paper aims to examine the validity of Wagner's law in Egypt for 1960–2018. The relationship between real government expenditure and real GDP is tested using three versions of Wagner's law.Design/methodology/approachTo test the validity of Wagner in Egypt, law time-series analysis is used. The methodology used in this paper is: unit-root tests for stationarity, Johansen cointegration approach, error-correction model and Granger causality.FindingsThe results provide strong evidence of long-term relationship between GDP and government expenditure. Moreover, the causal relationship is found to be bi-directional. Hence, this study provides support for Wagner's law in the examined context.Research limitations/implicationsIt should be noted, however, that there are some limitations to this study. For instance, in this paper, the government's size was measured through government consumption expenditure rather than government expenditure due to data availability, which does not fully capture the government size. Moreover, the data available was limited and does not fully cover the earliest stages of industrialization and urbanization for Egypt. Furthermore, although time-series analysis provides a more contextualized results and conclusions, the obtained conclusions suffer from their limited generalizability.Originality/valueThis paper aims to specifically make a contribution to the empirical literature for Wagner's law, by testing the Egyptian data using time-series econometric techniques for the longest time period examined so far, which is 1960–2018.

Abstract. The objective of this study is to provide empirical evidence on the short- and long-run relationships between the short-term interest rate, London interbank offered rate (LIBOR) and macroeconomic policy objectives, such as price stability, economic growth, and stability of the exchange rate market. For this purpose, we deploy quarterly frequency data from the United Kingdom between 2000 and 2015 and adopt a multiple regression model. Furthermore, this study uses the Johansen, Stock-Watson cointegration test and the Granger Causality test in order to examine the dynamic short- and long-run relationships among LIBOR, the consumer price index as a proxy of price stability, the real gross domestic product as a proxy of economic growth, and the exchange rate as a proxy of exchange rate market stability. The results showed that all variables have the same order of integration and long-run equilibrium relationships exist between them. The results show evidence of long-run equilibrium relationship between the variables with strong evidence of unidirectional granger causality flow from GDP, CPI and exchange rates to LIBOR. The recommendations proposed in this study have important policy implications for the U.K. government. It is therefore recommended that policy makers and government authorities together with the Bank of England develop and pursue sensible fiscal and monetary policies that would aim at stabilizing both the micro- and macroeconomic indicators such as the inflation rate, interest rate, exchange rate, and money supply, to enhance the growth of the economy, especially for the period after the BREXIT decision.Keywords. Macroeconomics, Interest rate, Monetary policy, London interbank offered rate, United Kingdom.JEL. E43, E51, E58.