scholarly journals Public Investments, Human Capital, and Political Stability: The Triptych of Economic Success

2014 ◽  
Vol 2014 ◽  
pp. 1-20
Author(s):  
Ioannis Kostakis
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Demographic Factors ◽  
Political Stability ◽  
Ordinary Least Squares ◽  
Policy Implications ◽  
Lower Growth ◽  
Public Investments ◽  
Public And Private Sector ◽  
The Impact

This study assesses the effects of fiscal policy on economic growth in a sample of 96 countries from 1990 to 2010. Ordinary Least Squares (OLS) and Extreme Bound Analysis are mainly estimated in order to investigate whether public investments, human capital, and political stability affect growth controlling for initial output and human capital levels. Furthermore, in this empirical research four subsets of independent variables were used: (a) demographic factors, (b) political determinants, (c) region variables, and (d) variables regarding macroeconomic policy. Empirical results suggest that there is an important difference in the impact of public and private sector investments on the growth of per capita income. Moreover, political indicators such as corruption control, rule of law, and government effectiveness have a high impact on economic growth. Demographic factors, including fertility rate and mortality growth, as well as several macroeconomic variables, like inflation rate index and government consumption, were estimated to be statistically significant factors of economic performance. Fiscal volatility may also be a new possible channel of macroeconomic instability that leads to lower growth. Policy implications of the findings are discussed in detail.

Fiscal Deficit and Economic Growth in Bangladesh

2016 ◽  
Vol 62 (1) ◽  
pp. 31-42 ◽  
Author(s):  
Ebney Ayaj Rana ◽  
Abu N. M. Wahid
Keyword(s):  
Economic Growth ◽  
Budget Deficit ◽  
Negative Impact ◽  
Political Stability ◽  
Ordinary Least Squares ◽  
Policy Implications ◽  
Government Budget ◽  
The Government ◽  
The Impact ◽  
Government Budget Deficit

The economy of Bangladesh is currently going through a period of continuous budget deficit. The present data suggest that the government budget deficit, on average, is nearly 5% of the country’s GDP. This has been true since the early 2000s. To finance this deficit, governments have been borrowing largely from domestic and foreign sources resulting in inflationary pressure on one hand, and crowding out of private investments on the other. During the same period, although the economy has grown steadily at a rate of more than 6%, this growth is less than the potential. This article presents an econometric study of the impact of government budget deficits on the economic growth of Bangladesh. We conduct a time-series analysis using ordinary least squares estimation, vector error correction model, and granger causality test. The findings suggest that the government budget deficit has statistically significant negative impact on economic growth in Bangladesh. Policy implications of our findings include reestablishing the rule of law, political stability in the country, restructuring tax structure, closing tax loopholes, and harmonizing fiscal policy with monetary policy to attract additional domestic and foreign investment.

scholarly journals The human capital–economic growth nexus in SSA countries: what can strengthen the relationship?

2020 ◽  
Vol 47 (9) ◽  
pp. 1143-1159
Author(s):  
Roseline Tapuwa Karambakuwa ◽  
Ronney Ncwadi ◽  
Andrew Phiri
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Least Squares ◽  
Ordinary Least Squares ◽  
African Countries ◽  
Content Type ◽  
Econometric Approach ◽  
The Impact ◽  
The Relationship ◽  
Ssa Countries

PurposeThe purpose of this study is to examine the impact of human capital on economic growth for a selected sample of nine SSA countries between 1980 and 2014 using a panel econometric approach.Design/methodology/approachThe authors estimate a log-linearized endogenous using the fully modified ordinary least squares (FMOLS) and the dynamic ordinary least squares (POLS) applied to our panel data time series.FindingsThe empirical analysis shows an insignificant effect of human capital on economic growth for our selected sample. These findings remain unchanged even after adding interactive terms to human capital, which are representatives of government spending as well as foreign direct investment. Nevertheless, the authors establish a positive and significant effect of the interactive term between urbanization and human capital on economic growth.Practical implicationsThe results emphasize the need for African policymakers to develop urbanized, “smart”, technologically driven cities within the SSA region as a platform toward strengthening the impact of human capital-economic growth relationship.Originality/valueThis study becomes the first in the literature to validate the human capital–urbanization–growth relationship for African countries.

Health investments and economic growth: a quantile regression approach

2018 ◽  
Vol 17 (2) ◽  
pp. 220-245 ◽  
Author(s):  
Francisca Rosendo Silva ◽  
Marta Simões ◽  
João Sousa Andrade
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Quantile Regression ◽  
Output Growth ◽  
Policy Implications ◽  
Infant Mortality Rate ◽  
Childhood Development ◽  
Lower Growth ◽  
Content Type ◽  
The Relationship

Purpose This study aims to analyse the relationship between health human capital and economic growth for a maximum sample of 92 countries over the period 1980-2010 taking into account countries’ heterogeneity by assessing how health variables affect different countries according to their position on the conditional growth distribution. Design/methodology/approach The paper estimates a growth regression applying the methodology proposed by Canay (2011) for regression by quantiles (Koenker, 1978, 2004, 2012a, 2012b) in a panel framework. Quantile regression analysis allows us to identify the growth determinants that present a non-linear relationship with growth and determine the policy implications specifically for underperforming versus over achieving countries in terms of output growth. Findings The authors’ findings indicate that better health is positively and robustly related to growth at all quantiles, but the quantitative importance of the respective coefficients differs across quantiles, in some cases, with the sign of the relationship greater for countries that recorded lower growth rates. These results apply to both positive (life expectancy) and negative (infant mortality rate, undernourishment) health status indicators. Practical implications Given the predominantly public nature of health funding, cuts in health expenditure should be carefully balanced even in times of public finances sustainability problems, particularly when growth slowdowns, as a decrease in the stock of health human capital could be particularly harmful for growth in under achievers. Additionally, the most effective interventions seem to be those affecting early childhood development that should receive from policymakers the necessary attention and resources. Originality/value This study contributes to the existing literature by answering the question of whether the growth effects of health human capital can differ in sign and/or magnitude depending on a country’s growth performance. The findings may help policymakers to design the most adequate growth promoting policies according to the behaviour of output growth.

scholarly journals Public and Private Infrastructure Investment and Economic Growth in Pakistan: An Aggregate and Disaggregate Analysis

2019 ◽  
Vol 11 (12) ◽  
pp. 3359 ◽  
Author(s):  
Javid
Keyword(s):  
Economic Growth ◽  
Private Investment ◽  
Ordinary Least Squares ◽  
Policy Implications ◽  
Infrastructure Investment ◽  
Public Infrastructure ◽  
Reverse Causality ◽  
Public And Private ◽  
Infrastructure Investments ◽  
The Impact

This study investigates the relationship between infrastructure investment and economic growth at the aggregate and sectoral levels, namely, the industrial, agriculture, and services sectors for Pakistan over the period from 1972 to 2015. In contrast to earlier literature, we make a comparative analysis of the different composition of infrastructure investments, including public versus private investment and infrastructure investment in sub-sectors such as in power, roads, and telecommunication sectors. The long-run relationship is estimated using fully modified ordinary least squares (FMOLS) to address the problem of reverse causality. The main conclusion of this study is that both public and private infrastructure investments have positive but different effects on economic growth. In other words, the marginal productivities of private and public infrastructure investments differ across the different sectors of the economy. In most of the cases, public infrastructure investment has a larger impact on economic growth than private infrastructure investment. Two important policy implications emerge from this study, as follows: (1) The different elasticity estimates can be used by policy makers to quantify the impact of policies targeted at the specific sector and (2) the government should develop an enabled policy environment to attract private investment, with the consideration of structural characteristics of the various sectors. The involvement of the private sector in the provision of infrastructure would help to control the tight budgetary situation.

scholarly journals THE IMPACT OF EXPORTS ON ECONOMIC GROWTH OF PAKISTAN AND INDIA

2019 ◽  
Vol 2 (02) ◽  
pp. 77-89
Author(s):  
Rasheed Khan
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Unit Root ◽  
Unit Root Test ◽  
Direct Foreign Investment ◽  
Ordinary Least Squares ◽  
Policy Makers ◽  
Augmented Dickey Fuller ◽  
The Impact ◽  
Adf Test

The aim of this study is to investigate the impact of exports on economic growth of Pakistan and India for the period of 1990 to 2016. The unit root test namely Augmented Dickey Fuller (ADF) test was used to identify stationarity in the data. The method of Fully Modified Ordinary Least Squares (FMOLS) was employed to estimate the coefficient of the variables. The FMOLS results exhibit that exports is having positive and significant impact on economic growth in both countries. Moreover, the empirical results reveal that Foreign Direct Investment (FDI) inflow and human capital have also positive and significant effect on the economic growth. The findings of this study suggest that policy makers need to make effective policies in order to increase the volume of exports as well as attract direct foreign investment and encourage human capital in order to stimulate economic growth.

scholarly journals Human capital formation and economic growth across the world: a panel data econometric approach

2019 ◽  
pp. 25-54
Author(s):  
Víctor Manuel Cuevas Ahumada ◽  
Cuauhtémoc Calderón Villarreal
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Panel Data ◽  
Measurement Errors ◽  
Institutional Development ◽  
Capital Formation ◽  
Dynamic Panel Data ◽  
Policy Implications ◽  
Human Capital Formation ◽  
The Impact

This paper estimates 12 dynamic panel data models to assess the impact of human capital formation and other key variables on the economic growth of 52 countries over a 13-year period. Several methodological and empirical contributions are made to assemble country groups, lower measurement errors and reduce the omitted variable bias while keeping the models parsimonious. Among other things, the evidence indicates that the responsiveness of economic growth to physical capital accumulation, institutional development, human capital formation, and total factor productivity varies across country groups to a certain extent. The policy implications of these findings are relevant on several grounds.

scholarly journals The impact of diseases on economic growth: the case of Viet Nam

2020 ◽  
Vol 3 (4) ◽  
pp. 428-437
Author(s):  
Pham Thanh Thai ◽  
Nguyen Thanh Le
Keyword(s):  
Public Health ◽  
Economic Growth ◽  
Infectious Diseases ◽  
Least Squares Method ◽  
Ordinary Least Squares ◽  
Policy Implications ◽  
World Health ◽  
New Knowledge ◽  
The Impact ◽  
Hiv Aids

The spread of diseases is a global challenge which affects life expectancy, productivity and economic growth. A healthy workforce has a faster acquisition of new knowledge to apply it to production and maintains high productivity, thereby promoting economic growth. On the contrary, a disease-infected workforce may have a low level of productivity, high expenses for disease treatment, insufficient health and finance to acquire new knowledge and as such, slowing down the economic growth. This study examines the implications of major infectious diseases, including HIV/AIDS, dengue, malaria and tuberculosis on the economic growth of Vietnam. The cointegration regression model with the ordinary least squares method is applied in the estimation procedure on a time series dataset obtained from World Bank, World Health Organization, UN and the Ministry of Health of Vietnam from 1986 to 2016. The results indicate that the number of new patients of any major infectious disease is negatively related to per-capita income. In particular, a 1% increase in the number of new patients with HIV/AIDS, tuberculosis, dengue and malaria leads to a decrease of 0.022%, 0.095%, 0.015% and 0.057% in yearly income, respectively. These findings have significant policy implications in terms of improving the effectiveness of the prevention of infectious diseases, protection of public health so as to boost the economic growth of the country. In addition, the results also provide add to the current literature evidence of the relationship between public health and economic growth in Vietnam.

scholarly journals Economic Growth in the Axis of Human Capital, R&D and Innovation: An Analysis on the G8 Countries

2014 ◽  
Author(s):  
Mustafa Gömleksiz ◽  
Birol Mercan
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Private Sector ◽  
Tertiary Education ◽  
Empirical Studies ◽  
Cross Sectional ◽  
Public And Private ◽  
Important Place ◽  
Public And Private Sector ◽  
The Impact

In recent years, human capital, R&D activities and innovation have an important place in both empirical studies related with economic growth and new growth models. In this context, it is drawn that innovations frequently arising from R&D activities are the main engine of the new economy, while productivity-based positive relationship between human capital and economic growth of the countries is emphasized by a variety of evidence. This paper empirically investigates the impact of human capital, R&D and innovation on economic growth in context of G8 countries. Indicators used in analyze covering the period 1998-2012 are gross domestic product per capita, public spending on education, population with tertiary education between aged 25-64, total public and private sector R&D expenditures and international patent grants. Such relationships were analyzed by using the panel data method for the 8 cross-sectional units and 15 year long period. The results indicate that impact of both human capital and innovation on economic growth is signifanctly positive. Furthermore, results show that the total public and private sector R&D expenditure has a negative effect on economic growth while its coefficient statistically insignificant. Latter result obtained from analyze also contribute to discussions about the roles of patents and public funding or public performed R&D in economic growth.

scholarly journals The Determinants of Economic Growth in Ghana: New Empirical Evidence

2018 ◽  
Vol 21 (3) ◽  
pp. 626-644 ◽  
Author(s):  
Sin-Yu Ho ◽  
Bernard Njindan Iyke
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Foreign Aid ◽  
Financial Development ◽  
Negative Impact ◽  
Government Expenditure ◽  
Positive Influence ◽  
Policy Implications ◽  
The Impact ◽  
Determinants Of Economic Growth

This article deals with an investigation into the determinants of economic growth in Ghana over the period from 1975 to 2014. In particular, we investigated the impact of physical capital, human capital, labour, government expenditure, inflation, foreign aid, foreign direct investment, financial development, globalization and debt servicing on economic performance within an augmented Solow growth model. It was found that, in the long run, both human capital and foreign aid have a positive influence on output, while labour, financial development and debt servicing have a negative impact on output. It was also found that, in the short run, government expenditure and foreign aid have a positive influence on economic growth, while labour, inflation and financial development have a negative impact on economic growth. These findings hold important policy implications for the country.

Testing the Governance-Productivity Nexus for Emerging Asian Countries

2018 ◽  
Vol 23 (1) ◽  
pp. 143-169
Author(s):  
Ghulam Mustafa ◽  
Muhammad Jamil
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Good Governance ◽  
Political Stability ◽  
Spillover Effects ◽  
Policy Implications ◽  
Government Effectiveness ◽  
Tfp Growth ◽  
Regulatory Quality ◽  
Positive Effect

This paper presents panel data estimates of the relationship between governance, aggregate labor productivity (ALP) growth and total factor productivity (TFP) growth for 12 Asian economies between 1996 and 2013. Our results show that government effectiveness has a positive and significant effect on ALP in both levels and first differences. Regulatory quality has a positive impact on ALP only in first difference. Although both government effectiveness and regulatory quality have a positive effect on TFP growth in first difference, only political stability is significant and positive in the levels specification. Other findings indicate that physical capital and human capital have a positive effect on ALP growth. We also find evidence of positive spillover effects with respect to human capital. The positive association between governance, economic growth and productivity provide a better understanding of the role of governance in enhancing economic performance. Our findings have policy implications for ways to achieve good governance to enhance economic growth and productivity.

Sign in / Sign up

Export Citation Format

Share Document