scholarly journals Fiscal and External Deficits Nexus in GIIPS Countries: Evidence from Parametric and Nonparametric Causality Tests

2021 ◽  
Author(s):  
Ahmad Hassan Ahmad ◽  
Olalekan Bashir Aworinde
Keyword(s):  
Capital Market ◽  
Trade Balance ◽  
Market Reforms ◽  
Fiscal Deficits ◽  
Quarterly Data ◽  
Government Deficits ◽  
Labour Market Reforms ◽  
Causality Tests ◽  
The Relationship ◽  
Political Decisions

AbstractThis paper investigates the relationship between fiscal and external deficits in five European Union countries (Greece, Ireland, Italy, Portugal, and Spain) using quarterly data for the period 1980:1–2020:1. Literature on the relationship between these series used linear techniques, but generally reported inconclusive results. Nonlinearity has been overlooked even though fiscal policy is likely to exhibit nonlinearity due to its sensitivity to political decisions. To capture this nonlinearity behaviour, nonlinear causality techniques are applied here in addition to the usual linear techniques used in the extant literature. The results show that there is evidence of unidirectional nonlinear causality from trade balances to government deficits in Greece and Italy, and a nonlinear unidirectional causality from government deficits to trade balance in Portugal. The results also indicate evidence of a nonlinear bi-directional causality between the trade and government balances in Ireland and Spain. The policy implication of these results is that governments of these countries need to address fiscal deficits to manage their trade balances. Policies that will improve the countries’ revenue base, such as tax and labour market reforms as well as capital market reforms to engender productivity and increase competitiveness, would be beneficial.

Reforming the Labour Market in Good and Bad Times

2018 ◽  
Author(s):  
Britta Gehrke ◽  
Enzo Weber
Keyword(s):  
Time Series ◽  
Business Cycle ◽  
Labour Market ◽  
Markov Switching ◽  
Matching Theory ◽  
Market Reforms ◽  
Structural Reforms ◽  
Labour Market Reforms ◽  
Short Run ◽  
The Business Cycle

This chapter discusses how the effects of structural labour market reforms depend on whether the economy is in expansion or recession. Based on an empirical time series model with Markov switching that draws on search and matching theory, we propose a novel identification of reform outcomes and distinguish the effects of structural reforms that increase the flexibility of the labour market in distinct phases of the business cycle. We find in applications to Germany and Spain that reforms which are implemented in recessions have weaker expansionary effects in the short run. For policymakers, these results emphasize the costs of introducing labour market reforms in recessions.

Party System

2018 ◽  
Author(s):  
Zaad Mahmood
Keyword(s):  
Labour Market ◽  
Party System ◽  
Political Competition ◽  
Group Analysis ◽  
Party Competition ◽  
Market Reforms ◽  
Intermediate Variable ◽  
Labour Market Flexibility ◽  
Labour Market Reforms ◽  
The Impact

The chapter discusses the party system in the macro context of politics. It highlights the limitations of political party and interest group analysis without reference to the political competition that shapes behaviour in politics. The chapter discusses theoretically the impact of party system on labour market flexibility and proceeds to show the interrelation between party competition and the behaviour of political parties, composition of socio-economic support bases, and the behaviour of interest groups that influence reform. In the context of labour market flexibility, the party-system operates as an intermediate variable facilitating reforms. The chapter contradicts the conventional notion that party system fragmentation impedes reform by showing how increasing party competition corresponds to greater labour market reforms. It shows that increases in the number of parties, facilitates labour market reforms through marginalization of the issue of labour, realignment of class interests within broader society and fragmentation of trade union movement.

scholarly journals Fractal analysis and the relationship between efficiency of capital market indices and COVID-19 in Iran

2021 ◽  
pp. 104262
Author(s):  
Mehrzad Alijani ◽  
Bahman Banimahd ◽  
Hashem Nikoomaram ◽  
Ahmad Yaghobnezhad
Keyword(s):  
Fractal Analysis ◽  
Capital Market ◽  
The Relationship

Understanding the positions taken by moderate union confederations and centre-left parties during labour market reforms in Portugal and Spain: Why the configuration of left parties and trade union confederations matters

2021 ◽  
pp. 095968012110057
Author(s):  
Paulo Marques ◽  
Dora Fonseca
Keyword(s):  
Labour Market ◽  
Trade Union ◽  
Stable Equilibrium ◽  
Market Reforms ◽  
Negative Consequences ◽  
Labour Market Reforms ◽  
Electoral Support ◽  
Over Time ◽  
Radical Left

The insider-outsider politics approach conjectures that moderate unions and centre-left parties safeguard the interests of insiders and neglect outsiders in labour market reforms. This article challenges this hypothesis. By comparing the positions taken by centre-left parties and moderate union confederations during labour market reforms in Portugal and Spain (1975–2019), it shows that while they may indeed protect insiders, they sometimes do the opposite. To explain this, the article argues that more attention must be paid to the configuration of left parties and confederations. In Portugal, where communist and radical left parties were strong, the centre-left was afraid of losing outsiders’ electoral support, and thus it did not follow a pro-insider strategy. This was reinforced by the fact that the centre-left had to face the opposition of a strong class-oriented confederation that was not willing to commit to two-tier reforms. This was not what happened in Spain. The centre-left, supported by a union confederation, undertook a two-tier reform in 1984 because there was a different configuration of left parties and confederations. Notwithstanding, this was not a stable equilibrium because this confederation changed its position over time when it realized the negative consequences of these reforms. Henceforth, their strategy became more pro-outsider.

Connecting the poor: the internet, mobile phones and financial inclusion in Africa

2018 ◽  
Vol 20 (6) ◽  
pp. 568-581 ◽  
Author(s):  
Olaniyi Evans
Keyword(s):  
Mobile Phones ◽  
Empirical Studies ◽  
Financial Inclusion ◽  
The Internet ◽  
African Countries ◽  
Macroeconomic Factors ◽  
Content Type ◽  
Developed Economies ◽  
Causality Tests ◽  
The Relationship

Purpose The increased adoption of internet-enabled phones in Africa has caused much speculation and optimism concerning its effects on financial inclusion. Policymakers, the media and various studies have all flaunted the potentials of internet and mobile phones for financial inclusion. An important question therefore is “Can the internet and mobile phones spur the inclusion of the financially excluded poor? This study therefore aims to examine the relationship and causality between internet, mobile phones and financial inclusion in Africa for the 2000-2016 period. Design/methodology/approach The empirical analysis followed these three steps: examination of the stationarity of the variables; testing for the cointegration; and evaluation of the effects of the internet and mobile phones on financial inclusion in Africa for the 2000-2016 period using three outcomes of panel FMOLS approach and Granger causality tests. Findings The empirical evidence shows that internet and mobile phones have significant positive relationship with financial inclusion, meaning that rising levels of internet and mobile phones are associated with increased financial inclusion. There is also uni-directional causality from internet and mobile phones to financial inclusion, implying that internet and mobile phones cause financial inclusion. The study also shows that macroeconomic factors such as capital formation, primary enrollment, bank credit, broad money, population growth, remittances, agriculture and interest rate, as well as institutional factors such as regulatory quality are important underlying factors for financial inclusion in Africa. Originality/value In the literature, there is a dearth of research on the internet, mobile phones and financial inclusion, especially in Africa. Most of the related studies are conceptual and micro-based, with little empirical attention to the relationship and causality between internet, mobile phones and financial inclusion. In fact, this dearth of rigorous empirical studies has been attributed as the main cause of inadequate policy guidance in enhancing information communication technologies (Roycroft and Anantho, 2003), despite saturation levels in developed economies. This study fills the gap by evaluating the effects of the Internet and mobile phones on financial inclusion for 44 African countries for the 2000-2016 period.

scholarly journals FDI and Economic Growth in EU13 Countries: Cointegration and Causality Tests

2020 ◽  
Vol 12 (3) ◽  
pp. 47-63
Author(s):  
Vlatka Bilas ◽  
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
European Union ◽  
Annual Data ◽  
Foreign Direct Investments ◽  
Causality Test ◽  
Panel Ardl ◽  
Long Run ◽  
Causality Tests ◽  
The Relationship

Foreign direct investments are seen as a prerequisite for gaining and maintaining competitiveness. The research objective of this study is to examine the relationship between foreign direct investment (FDI) and economic growth in “new” European Union member countries using various unit root, cointegration, as well as causality tests. The paper employs annual data for FDI and gross domestic product (GDP) from 2002 to 2018 for the 13 most recent members of European Union (EU13): Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia. An estimated panel ARDL (PMG) model found evidence that there is a long-run equilibrium between the LogGDP, LogFDI and LogFDIP series, with the rate of adjustment back to equilibrium between 3.27% and 20.67%. In the case of the LogFDI series, long-run coefficients are highly statistically significant in all four models, varying between 0.0828 and 0.3019. These coefficients indicate that a 1% increase in LogFDI increases LogGDP between 0.0828% and 0.3019%. Results of a Dumitrescu-Hurlin panel causality test indicated that a relationship between the GDP growth rate and FDI growth rate is only indirect. Finally, only weak evidence was shown that FDI had a statistically significant impact on GDP in the EU13 countries over the period 2002-2018. This report of findings contributes to the literature concerning FDI and economic growth, namely regarding the current understanding of the relationship between these two factors.

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