Empirical tests to discern the dynamic causal chain in macroeconomic activity: new evidence from Thailand and Malaysia based on a multivariate cointegration/vector error-correction modeling approach

1996 ◽  
Vol 18 (5) ◽  
pp. 531-560 ◽  
Author(s):  
Abul M.M. Masih ◽  
Rumi Masih
Keyword(s):  
Error Correction ◽  
Causal Chain ◽  
Vector Error Correction ◽  
Modeling Approach ◽  
Vector Error ◽  
Empirical Tests ◽  
Macroeconomic Activity ◽  
Error Correction Modeling ◽  
New Evidence ◽  
Multivariate Cointegration

scholarly journals Does Trade Openness Reduce Inflation? Empirical Evidence from Pakistan

2010 ◽  
Vol 15 (2) ◽  
pp. 35-50 ◽  
Author(s):  
Tahir MukhtarF
Keyword(s):  
Error Correction ◽  
Trade Liberalization ◽  
Trade Openness ◽  
Cointegration Test ◽  
Vector Error Correction Model ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Multivariate Cointegration

One of the more celebrated propositions found in international trade is the case that trade liberalization is associated with declining prices, so that protectionism is inflationary. In line with this view, Romer (1993) postulates the hypothesis that inflation is lower in small and open economies. The objective of this study is to examine Romer’s hypothesis in Pakistan. For this purpose, we have used multivariate cointegration and a vector error correction model. The study covers the period from 1960 to 2007. The empirical findings under the cointegration test show that there is a significant negative long-run relationship between inflation and trade openness, which confirms the existence of Romer’s hypothesis in Pakistan.

scholarly journals Test FOR Dynamic Relationship between Financial Development and Economic Growth in Malaysia: A Vector Error Correction Modeling Approach

2007 ◽  
Vol 9 (1) ◽  
pp. 61 ◽  
Author(s):  
Rosilawati Amiruddin ◽  
Abu Hassan Shaari Mohd Nor ◽  
Ismadi Ismail
Keyword(s):  
Economic Growth ◽  
Error Correction ◽  
Financial Development ◽  
Impulse Response Function ◽  
Vector Autoregressive ◽  
Vector Error Correction ◽  
Dynamic Relationship ◽  
Vector Error ◽  
Error Correction Modeling

This paper purports to study the effectiveness of financial development to Malaysian economic growth utilizing quarterly data. In view of the priority given to dynamic relationship in conducting this study, Vector Autoregressive (VAR) method which encompasses Johansen-Juselius’ Multivariate cointegration, Vector Error Correction Model (VECM), Impulse Response Function (IRF), and Variance Decomposition (VDC) are used as empirical evidence. The result reveals a short-term and long-term dynamic relationship between financial development and economic growth. The importance of financial sector in influencing the economic activity is proven as a clear policy implication.

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