scholarly journals Effects of Internal and External Imbalances and the Role of Relative Prices on Economic Growth: Evidence From Turkey

SAGE Open ◽  
2020 ◽  
Vol 10 (2) ◽  
pp. 215824402091949
Author(s):  
Irfan Civcir ◽  
M. Emir Yücel
Keyword(s):  
Economic Growth ◽  
Budget Deficit ◽  
Aggregate Demand ◽  
Balance Of Payments ◽  
Initial Model ◽  
Relative Prices ◽  
External Imbalances ◽  
External Demand ◽  
Interest Payments

Balance of payments constrained growth model considers that if a country has a chronic external deficit, economic growth can be constrained. Initial model extended by taking into account the effects of capital flows, external debt sustainability, interest payments, budget deficit or public debt, simultaneous effect of internal and external imbalance, and the role of relative prices. We further incorporate Turkey’s high intensity of imports in the aggregate demand components and estimated the model with system estimator. The new version of the model improves significantly explaining the growth in Turkey. Our results reveal that economic growth in Turkey constrained by internal and external imbalances and relative prices play a significant role. Policies aimed at changing the structure of the imports and exports are the most effective for achieving higher growth. It is also shown that economic growth in Turkey highly depends on external demand when the strong depreciation of the domestic currency also acts as a stimulus to growth.

scholarly journals Macroeconomics Activity and Role of Zaka in Achieving Economic Stability (Aggregate Demand/ Mathematical Analysis Study): الزكاة والنشاط الاقتصادي الكلي ودورهما في تحقيق الاستقرار الاقتصادي (الطلب الكلي/ دراسة تحليلية اقتصادية رياضية)

2021 ◽  
Vol 5 (23) ◽  
pp. 23-1
Author(s):  
Ahmad Mohammad Alsaad, Shatha Musa Al-Rawabdeh Ahmad Mohammad Alsaad, Shatha Musa Al-Rawabdeh
Keyword(s):  
Economic Growth ◽  
Mathematical Analysis ◽  
Economic Activity ◽  
Aggregate Demand ◽  
Graphical Analysis ◽  
Economic Stability ◽  
Analysis Study ◽  
Fund Development ◽  
Fund Investment

This research aimed to clarify and show the economic impact of Zaka fund development through theoretical, mathematical, and graphical analysis on macroeconomics variables which is related to aggregate demand, Researchers used theoretical, mathematical, graphical approaches for explanation economic variables. and used deductive approach through shows the effect of zakat on the aggregate Demand. The researcher concludes that the duty of Zaka induces economic growth and protects the economy from risk fluctuations whether it is recession or inflation. The researcher recommends to work on promoting the revival of Zaka, and the Zakat should be compulsory not voluntary through laws and regulations, ࢫbecause it raises the level of economic activity through its direct effect to stimulate fund investment, raise consumer’s demand and expand the market.

Role of External and Domestic Demand in Economic Growth: A Study of BRICS Countries

2019 ◽  
Vol 21 (2) ◽  
pp. 547-566 ◽  
Author(s):  
Bibhuti Ranjan Mishra
Keyword(s):  
Economic Growth ◽  
Developed Countries ◽  
Domestic Demand ◽  
Impulse Response Functions ◽  
Domestic Investment ◽  
Causality Analysis ◽  
Brics Countries ◽  
External Demand ◽  
The Impact

Despite the global downturn since 2008, the growth in BRICS countries as a group is least hampered as compared to the growth in the world, in general, and developed countries, in particular. Is it due to the strong domestic demand factors or external factors is an empirical question to be answered. Further, some economists are promulgating for a new development strategy of domestic demand-led growth. Hence, this article tries to examine the role of domestic and external demand to growth in BRICS countries. Domestic investment is taken to explore the impact of domestic demand on growth, while export and import variables are used to investigate the role of external demand in economic growth. To cater to the objective, causality analysis is done among exports, imports, domestic investment and economic growth using the vector auto regression analysis. Generalized impulse response functions are plotted to get an insight of dynamic interrelationships among these variables. The results are country-specific and mixed evidence of export-led and domestic demand-led growth is found depending on the individual countries of BRICS.

Structural Change, Balance of Payments Constraint, and Economic Growth: Evidence from Vietnam

2021 ◽  
pp. 048661342110109
Author(s):  
Woocheol Lee
Keyword(s):  
Economic Growth ◽  
Structural Changes ◽  
Jel Classification ◽  
Balance Of Payments ◽  
Relative Prices ◽  
Income Elasticities ◽  
Distributed Lag ◽  
Technology Products ◽  
Distributed Lag Models ◽  
The Impact

The impact of demand-side factors and rapid structural changes have largely been ignored in explaining the economic growth of Vietnam. This paper employs the multisectoral balance-of-payments constrained economic growth model to capture the influence of structural changes on the exports and economic growth of Vietnam over the period 1997–2016. Based on the estimates for the sectoral income elasticities of demand for exports and imports obtained from autoregressive distributed lag models, this paper argues that it is not relative prices but income that has played a significant role in Vietnam’s economic growth, the income elasticities of demand for exports have grown faster than those of demand for imports, and the weight of exports has significantly moved from primary to high-technology products. JEL Classification: E12, F43, O53

Does Manufacturing Matter?

1987 ◽  
Vol 122 ◽  
pp. 47-58 ◽  
Author(s):  
David G. Mayes
Keyword(s):  
Economic Growth ◽  
Foreign Exchange ◽  
Open Economy ◽  
High Technology ◽  
Balance Of Payments ◽  
Relative Importance ◽  
Second Line ◽  
Relative Prices ◽  
The Third ◽  
The Uk

It is a trivial truth that manufacturing matters while at current relative prices there are plenty of willing purchasers of manufactured goods. The question addressed in this article is whether it is important how much of that demand for manufactures is met from UK sources. There seem to be three general lines of argument which have been pursued. The first is that if manufacturing is low in relative importance then, since the UK is an open economy, it is relatively difficult for other sectors to generate the foreign exchange necessary to pay for the desired net imports of manufactures. In these circumstances the balance of payments acts as a brake on economic growth. The second line of argument is that because of its inherently faster rate of growth of productivity, particularly at the high technology end of the spectrum, an emphasis on manufacturing allows the economy to grow faster. The third argument is largely distributional; namely, that a decline in manufacturing would have wide knock-on effects on other firms and on employment.

scholarly journals Remittances, Regional Integration, and Balance of Payments Constrained Growth in El Salvador

2021 ◽  
Vol 13 (3) ◽  
pp. 50
Author(s):  
Luis Rene Caceres
Keyword(s):  
Economic Growth ◽  
El Salvador ◽  
Regional Integration ◽  
Balance Of Payments ◽  
The Other ◽  
Central American ◽  
Educational Systems ◽  
S Model

This paper presents a reworking of Thirlwall's model of economic growth restricted by the balance of payments for El Salvador, taking into account its trade flows with the other Central American countries and its remittances. The results indicate that there is a restriction on the economic growth of this country determined by the economic growth of the other countries of the subregion. It is also found that the role of remittances in alleviating external restriction is low. Evidence is presented that this restriction can be overcome by increasing the quality of education. The work concludes by pointing out the urgency for Central American countries to substantially improve the quality of their educational systems, as a means of increasing their economic dynamism.

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