AN ANALYSIS OF THE MANAGEMENT OF FISCAL DEFICIT OF PAKISTAN: AN ECONOMETRIC STUDY OF AUTO-REGRESSIVE DISTRIBUTIVE LAGS (ARDL) APPROACH

2018 ◽  
pp. 1-30 ◽  
Author(s):  
KHURRAM EJAZ CHANDIA ◽  
MUHAMMAD BADAR IQBAL ◽  
SAIRA AZIZ ◽  
IFRA GUL ◽  
BINESH SARWAR
Keyword(s):  
Fiscal Policy ◽  
Federal Government ◽  
Government Expenditures ◽  
Fiscal Deficit ◽  
Policy Reforms ◽  
Causality Test ◽  
Long Run ◽  
Ardl Approach ◽  
Short Run ◽  
Auto Regressive

Fiscal policy is an essential ingredient of economic performance. The fiscal policy is considered as a short-run measure; however, this has long-lasting outcomes for any economy. The current study has examined the connection among different constituents of fiscal policy, i.e., federal government revenues and federal government expenditures; federal government revenues and different components of federal government expenditures; federal government expenditures and different components of federal government revenues and fiscal deficit and influential budgetary variables in the context of the economy of Pakistan. The study has empirically investigated the relationship among the budgetary variables for Pakistan from 1979 to 2017. For data analysis, time-series econometric techniques such as auto-regressive distributive lag (ARDL) approach and Granger causality test have been employed. The results of ARDL bounds test approach suggest the existence of long-run equilibrium relationship among the variables. The result of CUSUM and CUSUMSQ shows the stability of functional relationship tested in this study, which means that model is a useful instrument for policymaking. So, a rise or fall in budgetary variables causes changes in fiscal deficit in long run. The results of study endorse the proof of spent-and-tax hypothesis in the economy of Pakistan. The study suggests the need for extensive fiscal policy reforms in Pakistan.

scholarly journals Government Expenditure and Tax Revenue, Causality and Cointegration: The Experience of Pakistan (1972-2007).

2009 ◽  
Vol 48 (4II) ◽  
pp. 951-959 ◽  
Author(s):  
Zinaz Aisha ◽  
Samina Khatoon
Keyword(s):  
Fiscal Policy ◽  
Granger Causality ◽  
Government Expenditure ◽  
Economic Consequences ◽  
Government Expenditures ◽  
Tax Revenue ◽  
Causality Test ◽  
Long Run ◽  
Short Run ◽  
Tax Hypothesis

This paper establishes empirically the causal relationship and long run relationship between government expenditures and government revenues for the case of Pakistan from 1972 to 2007. Fiscal policy, a short run issue, but that can have testing macro economic consequences. Fiscal policy is viewed as an instrument to mitigate short run fluctuations. In this paper we examine tax/spend or spend/tax hypothesis. For this purpose, bi-directional Granger causality will be applied for instance flow from government expenditure to revenue or revenue to government expenditure. This issue has been concerned with intretemporal relationship between revenue and expenditure, so to check long run relationship Engel Granger cointegration will be used. For checking data stationary, non stationary unit root, and ADF/DF approaches give the proof for this hypothesis. The results show the presence of co-integration between government expenditure and tax revenue variables implying evidence of a stable long-run relationship between them. The Granger Causality test suggest the unidirectional causality flow from government expenditure to tax revenue. Keywords: Government Expenditures, Government Revenues, Granger Causality, Stationary, Co-integration

Dynamic linkages between Non-renewable energy, Renewable energy and Economic growth through nonlinear ARDL approach: Evidence from Malaysia

2021 ◽  
Author(s):  
Rafia Afroz ◽  
Md Muhibbullah
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Asymmetric Effect ◽  
Nonlinear Ardl ◽  
Long Run ◽  
Ardl Approach ◽  
Consumption Reduction ◽  
Short Run ◽  
Auto Regressive ◽  
Nardl Model

Abstract The purpose of this paper is to investigate the links between renewable energy (RE), non-renewable energy (NRE), capital, labour and economic growth, using the Non-linear Auto Regressive Distributive Lag (NARDL) model in Malaysia for the period of 1980–2018. The results of NARDL confirm the asymmetric effect of RE and NRE consumption on the economic growth in the long run as well as short run in Malaysia. The findings also show that in the long and short-run, positive shocks of NRE are greater than the positive shocks of RE. It indicates that Malaysia's economic growth is highly dependent on NRE which is not a good indication as NRE consumption increases carbon dioxide (CO2) emission in the country. Moreover, the empirical results of this study demonstrated that RE consumption reduction accelerates economic growth whereas NRE consumption reduction decreases economic growth. It can have claimed that in Malaysia RE is still more expensive than NRE. In conclusion, this study offered a variety of measures to develop RE to reduce the dependency on NRE consumption.

Cointegration of Asian Stock Markets: Empirical Evidence from India

2016 ◽  
Vol 6 (2) ◽  
Author(s):  
Beeralaguddada Srinivasa Veerappa
Keyword(s):  
Stock Market ◽  
Stock Returns ◽  
Stock Markets ◽  
Causality Test ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Short Run ◽  
Auto Regressive ◽  
Global Stock Markets ◽  
Indian Stock Market

At present stock return is significantly related to other global stock markets. The present paper empirically investigates the short run and long run equilibrium relationship between the stock market of India, Japan Hong Kong, Singapore, Malaysia, China, and Australia monthly data during January 1995 to December 2013. Researcher employs correlation test, multivariate co-integration framework, Vector Auto Regressive error-correction model and Granger causality test with reference to financial up evils in Asia and world viz., Asian crisis (1997/98), financial crisis (2008) Inflation conditions, Natural disasters, financial up evils etc. of long run relationship. Results find that the Indian stock market return is significantly co-integrated with long run and short run situations/causalities in Asian Stock returns.

The Determinants of Health Expenditures in Tunisia

2018 ◽  
pp. 253-267
Author(s):  
Sami Chaabouni ◽  
Chokri Abednnadher
Keyword(s):  
Health Expenditures ◽  
Determinants Of Health ◽  
Causality Test ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Capita Health Expenditure ◽  
Long Run ◽  
Ardl Approach ◽  
Short Run ◽  
The One

This article examines the determinants of health expenditures in Tunisia during the period 1961-2008, using the Autoregressive Distributed Lag (ARDL) approach by Pesaran et al. (2001). The results of the bounds test show that there is a stable long-run relationship between per capita health expenditure, GDP, population ageing, medical density and environmental quality. In fact, on the one hand there are the short-run and long-run results which reveal that health care is a necessity, not a luxury good. On the other hand, results of the causality test show that there is a bidirectional causal flow from health expenditures to income, both in the short and in the long run.

scholarly journals The Impact of FDI on the Economic Growth of Sri Lanka: An ARDL Approach to Co-integration

2017 ◽  
Vol 3 (1) ◽  
pp. 70-82 ◽  
Author(s):  
Samantha NPG ◽  
Liu Haiyun
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
Manufacturing Sector ◽  
Economic Policies ◽  
Policy Reforms ◽  
Long Run ◽  
Greenfield Investments ◽  
Ardl Approach ◽  
Short Run ◽  
The Impact

The impact of foreign direct investment(FDI) on host country economic growth is a debatable issue in the recent economic literature. The purpose of this study is to examine this issue for a country which practiced comparatively more liberal economic policies within the South Asian region over four decades. The ARDL approach to cointegration is applied to identify long-run relationship and short-run dynamics between selected variables for the period of 1978 to 2015 for Sri Lanka. The empirical result confirms the long run relationship between the variables. FDI is positively correlated with economic growth in the short run and long run, but it is not a significant factor for economic growth in Sri Lanka. Sri Lanka will have to undertake policy reforms related to FDI in order to attract more greenfield investments to boost economic growth creating new job opportunities and expanding exports in the manufacturing sector. These findings would be an example for other small open economies with similar economic characteristics.

Loss of Employment, Lockdown Measures and Government Responses in Malaysia during the Covid-19 Pandemic: A Note

2021 ◽  
Vol 22 (3) ◽  
pp. 1525-1549
Author(s):  
Muzafar Shah Habibullah ◽  
Mohd Yusof Saari ◽  
Sugiharso Safuan ◽  
Badariah Haji Din ◽  
Anuar Shah Bali Mahomed
Keyword(s):  
Job Loss ◽  
Positive Association ◽  
Distributed Lag ◽  
Long Run ◽  
Ardl Approach ◽  
Short Run ◽  
Auto Regressive ◽  
The Government ◽  
The Relationship ◽  
Stimulus Package

In this paper, we use daily administrative data from January 25, 2020 to December 31, 2020 to examine the relationship between job losses and the Malaysian lockdown measures. The Auto Regressive Distributed Lag (ARDL) approach is used to estimate both the long-run and short-run models. The results of the Bounds F-test for cointegration reveal that there is a long-run link between job losses and the Malaysian government lockdown measures (both linear and non-linear). The positive association between job loss and lockdown measures shows that as the lockdown gets tighter, more people will lose their jobs. However, as time passes, especially in conjunction with the government stimulus package programmes, job losses decrease.

scholarly journals Effect of Public Debt on Public Investment in Nigeria: 1985-2018

2021 ◽  
pp. 98-114
Author(s):  
Chukwu, Kenechukwu Origin ◽  
Ogbonnaya-Udo, Nneka ◽  
Chimarume Blessing Ubah
Keyword(s):  
Federal Government ◽  
Public Debt ◽  
Budget Deficit ◽  
Public Investment ◽  
Independent Variables ◽  
Distributed Lag ◽  
Long Run ◽  
Distributed Lag Models ◽  
Short Run ◽  
Auto Regressive

This study examined the effect of Nigeria public debt on public investment from 1985-2018. Data for the analysis was obtained from Central Bank of Nigeria Statistical bulletin and the study chooses Nigeria as its sample. ARDL Auto-regressive Distributed lag models was used to test the effect of the independent variables (Public Debt, Budget Deficit, Debt Servicing, Public Debt to GDP Ratio) on the dependent variable (Public Investment). The cointegration test found the existence of long-run relationship among the investigated variables. The short run result shows that public debt has insignificant effect on public investment in Nigeria. The study therefore recommends among others that Federal government should be fiscal responsible by channeling borrowed funds to investments that will bring growth in the economy. Government should tackle waste and corruption by making sure that funds borrowed and allocated for investment should be transparently and judiciously utilized in the provision of infrastructure. Debts should be taken only when necessary and should be for investment and not for payment of salaries.

Cointegration of Asian Stock Markets: Empirical Evidence from India

GIS Business ◽  
2016 ◽  
Vol 11 (5) ◽  
pp. 25-40
Author(s):  
Beeralaguddada Srinivasa Veerappa
Keyword(s):  
Stock Market ◽  
Stock Returns ◽  
Stock Markets ◽  
Causality Test ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Short Run ◽  
Auto Regressive ◽  
Global Stock Markets ◽  
Indian Stock Market

At present stock return is significantly related to other global stock markets. The present paper empirically investigates the short run and long run equilibrium relationship between the stock market of India, Japan Hong Kong, Singapore, Malaysia, China, and Australia monthly data during January 1995 to December 2013. Researcher employs correlation test, multivariate co-integration framework, Vector Auto Regressive error-correction model and Granger causality test with reference to financial up evils in Asia and world viz., Asian crisis (1997/98), financial crisis (2008) Inflation conditions, Natural disasters, financial up evils etc. of long run relationship. Results find that the Indian stock market return is significantly co-integrated with long run and short run situations/causalities in Asian Stock returns.

The Determinants of Health Expenditures in Tunisia

2014 ◽  
Vol 6 (4) ◽  
pp. 60-72 ◽  
Author(s):  
Sami Chaabouni ◽  
Chokri Abednnadher
Keyword(s):  
Health Expenditures ◽  
Determinants Of Health ◽  
Causality Test ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Capita Health Expenditure ◽  
Long Run ◽  
Ardl Approach ◽  
Short Run ◽  
The One

This article examines the determinants of health expenditures in Tunisia during the period 1961-2008, using the Autoregressive Distributed Lag (ARDL) approach by Pesaran et al. (2001). The results of the bounds test show that there is a stable long-run relationship between per capita health expenditure, GDP, population ageing, medical density and environmental quality. In fact, on the one hand there are the short-run and long-run results which reveal that health care is a necessity, not a luxury good. On the other hand, results of the causality test show that there is a bidirectional causal flow from health expenditures to income, both in the short and in the long run.

scholarly journals The Relationship between Government Size and Economic Growth in Iran; Bivariate and Trivariate Causality Testing

2012 ◽  
Vol 4 (5) ◽  
pp. 268-276
Author(s):  
Salma Keshtkaran ◽  
Farzane Bagheri .
Keyword(s):  
Economic Growth ◽  
Government Size ◽  
Causality Test ◽  
The Third ◽  
Oil Revenue ◽  
Long Run ◽  
Short Run ◽  
Auto Regressive ◽  
Causality Relationship ◽  
The Relationship

The aim of this study is to demonstrate the relationship between government size and economic growth in Iran within bivariate and trivariate causality framework. For this purpose, Vector Auto Regressive Model, Johansen Test and Auto Regressive Distributed Lag Model were used for analyzing the long run relationship, whereas Error Correction Model was considered for the short run. Moreover Wald Coefficient was used for bivariate and trivariate causality test. The results show that the relationship between government size and economic growth in Iran is negative. Furthermore there is a one-way causality relationship for the long run and the short run-from government size to economic growth. Inclusion of unemployment and oil revenue (separately) as the third variable causes the relationship to remain negative. However the direction of causality depends on the choice of the third variable. If unemployment rate is considered as the third variable instead, there will be no causality between the two variables in the long run. Although in the short run government size is still the cause of economic growth. However, consideration of oil revenue as the third variable results in a two-way causality relationship between the government size and the economic growth in the long run and the short run.

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