India’s Demographic Dividend: The Millennials’ Savings Conundrum

India’s working-age group has been over 60 per cent of its population for over two decades, with a record high of 66 per cent in 2018. The gross domestic savings (GDS), yet, plummeted during the previous decade, recording a low of 29.34 per cent in 2018. This is a divergence from the demographic theories which indicate that a rising working-age population will increase savings. Past research on India’s demographic transitioning implications on economic growth and demographic dividend focused on the working-age group. This article brings in a new dimension to existing studies and analyses savings trends by examining working-age youth, and the millennials within this subgroup, in particular. By considering data from between 1980 and 2017, the article investigates the influence of these two demographic variables on the GDS, along with key macroeconomic variables. The estimation techniques applied are the autoregressive distributed lag (ARDL) cointegration technique and the vector error correction model (ECM). The results indicate that the millennial youth’s influence on GDS is statistically significant. Though the long-term influence of the millennial youth working-age group indicates a positive effect on GDS, the adverse impact reflected in the short run may be pointing towards the future financial sustainability of this segment. Although youth savings are expected to be the lowest in the working-age segment, the significant fall in the youth ratio of employment-to-population in the 20–29 years segment, especially since 2005 onwards, raises the thrust for youth policies that can unravel the millennial savings conundrum and thereby pave the way for India’s demographic dividend.

Download Full-text

Modelling the Temporal Effect of Terrorism on Tourism in Kenya

International Journal of Economics and Finance ◽

10.5539/ijef.v8n12p10 ◽

2016 ◽

Vol 8 (12) ◽

pp. 10 ◽

Cited By ~ 3

Author(s):

Brian K. Masinde ◽

Steven Buigut ◽

Joseph K. Mung'atu

Keyword(s):

Testing Procedure ◽

Tourism Industry ◽

Bounds Testing ◽

Causality Test ◽

Vector Error Correction ◽

Distributed Lag ◽

Autoregressive Distributed Lag ◽

Long Run ◽

Short Run ◽

Long Run Equilibrium

<p>Terrorist attacks have escalated over the recent years in Kenya, with adverse effects on the tourism industry. This study aims to establish if a long-run equilibrium exists between terrorism and tourism in Kenya between the years 1994 and 2014. To reinforce the robustness of the results, both Autoregressive Distributed Lag (ARDL) bounds testing and the Vector Error Correction Model (VECM) techniques are used to investigate the problem. A Granger causality test is also carried out to ascertain the direction of the relationship if one exists. The evidence from ARDL and the VECM testing procedure suggest that there is no long-run equilibrium between terrorism and tourism in Kenya. Terrorism does not Granger cause tourism and vice versa. However, short-run effect indicates that terrorism negatively and significantly affects tourism.</p>

Download Full-text

Does Monetary Policy Affect Economic Growth in Jordan? Evidence from Ordinary Least Square Models

International Business Research ◽

10.5539/ibr.v12n1p27 ◽

2018 ◽

Vol 12 (1) ◽

pp. 27

Author(s):

Mohamed Ibrahim Mugableh

Keyword(s):

Economic Growth ◽

Monetary Policy ◽

Positive Impact ◽

Least Square ◽

Vector Error Correction ◽

Ordinary Least Square ◽

Distributed Lag ◽

Autoregressive Distributed Lag ◽

Long Run ◽

Short Run

The main objective of this paper is to analyze equilibrium and dynamic causality relationships between monetary policy tools and economic growth in Jordan for the period (1990-2017). For this purpose, it considers the autoregressive distributed lag (ARDL) and vector error correction (VEC) models estimations. The results of ARDL approach show that monetary policy variables (i.e., real interest rate and money supply) have positive impact on economic growth in long-run and short-run except inflation rate. In addition, the results of VECM indicate bidirectional causal relationships between economic growth and monetary policy variables in long-run and short-run.

Download Full-text

Are Energy Consumption, Population Density and Exports Causing Environmental Damage in China? Autoregressive Distributed Lag and Vector Error Correction Model Approaches

Sustainability ◽

10.3390/su13073749 ◽

2021 ◽

Vol 13 (7) ◽

pp. 3749

Author(s):

Mohammad Mafizur Rahman ◽

Xuan-Binh (Benjamin) Vu

Keyword(s):

Energy Consumption ◽

Co2 Emissions ◽

Environmental Damage ◽

Correction Model ◽

Vector Error Correction ◽

Distributed Lag ◽

Autoregressive Distributed Lag ◽

Vector Error ◽

Long Run ◽

Short Run

This paper investigates whether energy consumption, population density, and exports are the main factors causing environmental damage in China. Using annual data from 1971–2018, unit root tests are applied for the stationarity analyses, and Autoregressive Distributed Lag (ARDL) bounds tests are used for the long-run relationships between the variables. A Vector Error Correction Model (VECM) Granger approach is employed to examine the causal relationships amongst the variables. Our findings show that the selected variables are cointegrated, and that energy consumption and economic growth are identified as the main reasons for CO2 emissions in both the short-run and long-run. In contrast, exports reduce CO2 emissions in the long-run. Short-run unidirectional Granger causality is found from economic growth to energy consumption, CO2 emissions and exports, and from CO2 emissions to energy consumption and exports. Moreover, long-run causal links exist between CO2 emissions and exports. Five policy recommendations are made following the obtained results.

Download Full-text

Investment Portfolio, Democratic Accountability, Poverty and Income Inequality Nexus in Pakistan: A Way to Social Sustainability

Sustainability ◽

10.3390/su13116411 ◽

2021 ◽

Vol 13 (11) ◽

pp. 6411

Author(s):

Muhammad Shahid Hassan ◽

Haider Mahmood ◽

Muhammad Ibrahim Saeed ◽

Tarek Tawfik Yousef Alkhateeb ◽

Noman Arshed ◽

...

Keyword(s):

Income Inequality ◽

Social Sustainability ◽

Data Availability ◽

Democratic Accountability ◽

Investment Portfolio ◽

Economic Activities ◽

Distributed Lag ◽

Autoregressive Distributed Lag ◽

Short Run

Institutions help to streamline the economic activity-related procedures, where government intervention might be involved. Institutions also play a significant role in social sustainability. The findings using the Autoregressive Distributed Lag approach to cointegration for the period from 1984–2019 reveal that investment portfolio and democratic accountability reduce poverty in Pakistan both in the long and short run. Moreover, democratic accountability helps to reduce income inequality, but the investment portfolio’s role is not significant. The literacy rate helps to reduce income inequality, and inflation increases poverty and income inequality. The remittances increase income inequality, and urbanization increases poverty. To eradicate poverty and income inequality, the governments should be accountable for their actions to the general public while they remain in power. If they do not deliver as per their manifestoes, they will not be reelected in the next election. Moreover, there is a dire need to redefine the role of an investment portfolio to reduce the risk of investment. So, investments would increase economic activities and could reduce poverty and income inequality. This study contributes to the literature by inquiring about the role of the investment portfolio and democratic accountability in social sustainability by reducing poverty and income inequality. This study only considers Pakistan’s economy due to limitations of poverty data availability in other countries. The scope could further be broadened by accessing data for a wider Asia region to test the role of the investment portfolio and democratic accountability to reduce poverty and income inequality.

Download Full-text

Impact of Environmental Tax on Comparative Advantage of Food and Food Products: A Study of G20 Countries in Light of Environmentally Sensitive Goods

The Indian Economic Journal ◽

10.1177/00194662211035273 ◽

2021 ◽

pp. 001946622110352

Author(s):

Alisha Mahajan ◽

Kakali Majumdar

Keyword(s):

Comparative Advantage ◽

Food Products ◽

Environmental Taxes ◽

Environmental Tax ◽

Distributed Lag ◽

Autoregressive Distributed Lag ◽

Long Run ◽

Short Run ◽

Environmentally Sensitive ◽

The Relationship

Many countries are under constant fear that environmental policies might negatively influence the international competitiveness of polluting industries. In this study, we aim to evaluate the relationship and impact of the environmental tax on comparative advantage of trade in food and food products industry, considered to be one of the highly environmentally sensitive industries. This study also investigates, whether this relationship differs among countries covered in G20, with the help of correlation analysis. We select panel autoregressive distributed lag approach for this study as it can analyse long-run as well as short-run association even when the variables are stationary at different orders of integration. Using panel data from G20 countries over the period of 21 years that is from 1994 to 2015, it is concluded that when we allow environmental taxes to interact with the revealed comparative advantage (RCA) of G20 nations, the overall impact of the environmental tax on the RCA is negative in the long period. It is therefore suggested that countries should follow Porter hypothesis to stimulate innovations resulting from strict environmental regulations that affect the environment in least possible manner. JEL Codes: C01, C23, C33, F18, O57, Q5

Download Full-text

Dollarization in Sierra Leone: Evidence and Some Policy Options

Applied Economics and Finance ◽

10.11114/aef.v7i4.4920 ◽

2020 ◽

Vol 7 (4) ◽

pp. 160

Author(s):

Abu Bakarr TARAWALIE ◽

Amadu JALLOH

Keyword(s):

Exchange Rate ◽

Sierra Leone ◽

Correction Term ◽

Financial Deepening ◽

Policy Makers ◽

Distributed Lag ◽

Autoregressive Distributed Lag ◽

Short Run ◽

Key Policy ◽

Main Determinants

This study aims to empirically investigate the determinants of dollarization in Sierra. It uses quarterly data from 1992Q1 to 2017Q4 and autoregressive distributed lag Bound Testing technique. Both the long and short run results revealed that inflation, exchange rate depreciation, financial deepening and war dummy were the main determinants of dollarization in Sierra Leone during the study period. The error correction term depicts that 53 percent of any disequilibrium in dollarization will be corrected within a year. A key policy recommendation is that policy makers should implement prudent policies that will ensure broader macroeconomic stability (including price stability and exchange rate stability) as a recipe for de-dollarization in Sierra Leone.

Download Full-text

The Determinants of Food Prices in Pakistan

THE LAHORE JOURNAL OF ECONOMICS ◽

10.35536/lje.2012.v17.i1.a6 ◽

2012 ◽

Vol 17 (1) ◽

pp. 101-128 ◽

Cited By ~ 2

Author(s):

Henna Ahsan ◽

Zainab Iftikhar ◽

M. Ali Kemal

Keyword(s):

Active Role ◽

Food Prices ◽

Significant Variable ◽

Demand And Supply ◽

Distributed Lag ◽

Distributed Lag Model ◽

Autoregressive Distributed Lag ◽

Long Run ◽

Short Run ◽

Lag Model

Controlling prices is one of the biggest tasks that macroeconomic policymakers face. The objective of this study is to analyze the demand- and supply-side factors that affect food prices in Pakistan. We analyze their long-run relationship using an autoregressive distributed lag model for the period 1970–2010. Our results indicate that that the most significant variable affecting food prices in both the long and short run is money supply. We also find that subsidies can help reduce food prices in the long run but that their impact is very small. Increases in world food prices pressurize the domestic market in the absence of imports, which cause domestic food prices to rise. If, however, we import food crops at higher international prices, this can generate imported inflation. The error correction is statistically significant and shows that market forces play an active role in restoring the long-run equilibrium.

Download Full-text

Does the Export-Led Growth Hypothesis Hold for Services Exports in Emerging Economies?

Eurasian Journal of Business and Economics ◽

10.17015/ejbe.2021.027.04 ◽

2021 ◽

Vol 14 (27) ◽

pp. 63-75

Author(s):

Okpeku Lilian ONOSE ◽

◽

Osman Nuri ARAS ◽

Keyword(s):

Economic Growth ◽

Emerging Economies ◽

Emerging Countries ◽

Distributed Lag ◽

Autoregressive Distributed Lag ◽

Long Run ◽

Short Run ◽

Per Capita ◽

Positive Effect ◽

Growth Hypothesis

The export-led growth hypothesis states a positive relationship between the growth of exports and long-run economic growth. This study examines the validity of the export-led growth hypothesis of services exports in 5 emerging economies, including Brazil, India, Nigeria, China, and South Africa (BINCS), for the period of 1980-2019. The study employs the panel mean group autoregressive distributed lag (ARDL) procedure to identify a causal relationship between services exports and gross domestic product (GDP) per capita. The findings show that the export-led growth hypothesis in services only has a positive effect on economic growth in the short run while other variables, including foreign direct investment (FDI), gross capital formation, and labour, increase economic growth in the long run. Hence, the emerging countries should focus more on internal investment to boost growth in the long and short run.

Download Full-text

FDI location and exchange rates. is there really a relationship between the two?

Corporate Ownership and Control ◽

10.22495/cocv13i1c6p3 ◽

2015 ◽

Vol 13 (1) ◽

pp. 642-651

Author(s):

Kunofiwa Tsaurai

Keyword(s):

South Africa ◽

Exchange Rates ◽

Coming Out ◽

Causal Relation ◽

Exact Nature ◽

Bounds Testing ◽

Distributed Lag ◽

Autoregressive Distributed Lag ◽

Long Run ◽

Short Run

The exchange rate led foreign direct investment (FDI), FDI led exchange rates and feedback effect hypotheses summarise the literature around the nature of the relationship between FDI and exchange rates. So many authors on this subject over a long period have been found to generally side with of the above-mentioned hypothesis or another without a consensus. Despite this lack of consensus with regard to the exact nature of the causal relation between these two variables, what is coming out clearly from the literature is that there indeed exist a relationship between FDI and exchange rates. The lack of consensus has prompted this current study that used the ARDL (Autoregressive distributed lag)-bounds testing approach. The study revealed the existence of causality from (1) the rand value to FDI in the long run and (2) FDI to the rand value only in the short run in South Africa. The author recommends that policies which strengthen the value of the rand should be put in place in order to attract FDI in the long run. The flow of FDI into South Africa will in turn not only stabilises the value of the rand.

Download Full-text

COINTEGRATED-BASED FORECAST OF LONG-RUN RELATIONSHIPS

SERIES V - ECONOMIC SCIENCES ◽

10.31926/but.es.2021.14.63.1.16 ◽

2021 ◽

Vol 14(63) (1) ◽

pp. 153-168

Author(s):

Klara-Dalma Deszke ◽

Liliana Duguleana

Keyword(s):

Vector Error Correction ◽

Final Consumption ◽

Distributed Lag ◽

Distributed Lag Model ◽

Autoregressive Distributed Lag ◽

Vector Error ◽

Long Run ◽

Lag Model ◽

Relationship Of

The Vector Error Correction Model (VECM) and the Autoregressive Distributed Lag Model (ARDL) are used to estimate the cointegration in the case of long-run relationship of quarterly GDP and Final Consumption in Romania during the period 1995 – 2019. The actual data of 2020 Q1 and Q2 were used to check the best model’s validity. The static and dynamic approaches of the ARDL model were used to forecast the Final Consumption for Q3 and Q4 of the year 2020. Applying the cointegration model shows the long term relationship of GDP and Final Consumption, but also the effects of other factors, seen in the differences of Final Consumption from its Long-Run evolution, and comprised in the cointegrating terms.

Download Full-text