scholarly journals A Dynamic Analysis of the Impact of Fiscal Adjustment on Economic Growth: Evidence From Pakistan

SAGE Open ◽  
2021 ◽  
Vol 11 (2) ◽  
pp. 215824402110271
Author(s):  
Ibrar Hussain ◽  
Jawad Hussain ◽  
Arshad Ali ◽  
Shabir Ahmad
Keyword(s):  
Economic Growth ◽  
Causality Test ◽  
Distributed Lag ◽  
Fiscal Adjustment ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Empirical Calibration ◽  
Short Run ◽  
S Model ◽  
The Impact

This study claims to be the first in assessing the short-run and long-run impacts of both the size and composition of fiscal adjustment on the growth in Pakistan. Empirical calibration has been made on Mankiw et al.’s model, while the Autoregressive Distributed Lag (ARDL) techniques of Pesaran et al. have been employed to carry out the estimation. To cure the problem of degenerate cases, the ARDL techniques have been augmented with the model of Sam et al. The analysis supports the hypothesis of “expansionary fiscal contraction” in the long run. The analysis reveals that the spending-based adjustment enhances the economic growth, whereas the tax-based adjustment would reduce the growth in the long run in the case of Pakistan. The Granger causality test indicates that the fiscal adjustments have been weakly exogenous, thereby allowing feedback effect from the economic growth toward the fiscal adjustment. Thus, the objective of sustained economic growth can be achieved through the spending-based consolidation measures.

SHORT-RUN AND LONG-RUN IMPACT OF INFLATION, UNEMPLOYMENT, AND ECONOMIC GROWTH TOWARDS POVERTY IN INDONESIA: ARDL APPROACH

2019 ◽  
Vol 2 (1) ◽  
pp. 15
Author(s):  
Ahmadi Murjani
Keyword(s):  
Economic Growth ◽  
Poverty Alleviation ◽  
Macroeconomic Variables ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Ardl Approach ◽  
Short Run ◽  
The Government ◽  
The Impact

 Poverty alleviation has become a vigorous program in the world in recent decades. In line with the efforts applied by the government in various countries to reduce poverty, some evaluations have been practised. The impacts of macroeconomic variables such as inflation, unemployment, and economic growth have been commonly employed to be assessed for their impact on the poverty. Previous studies in Indonesia yielded mix results regarding the impact of such macroeconomic variables on the poverty. Different methods and time reference issue were the suspected causes. This paper aims to overcome such problem by utilising the Autoregressive Distributed Lag (ARDL) equipped with the latest time of observations. This paper finds in the long-run, inflation, unemployment, and economic growth significantly influence the poverty. In the short-run, only inflation and economic growth are noted affecting poverty significantly. 

scholarly journals Zakat and SDGs: Impact Zakat on Human Development in the Five States of Malaysia

2017 ◽  
Vol 2 (1) ◽  
pp. 61-69 ◽  
Author(s):  
Eko Suprayitno ◽  
Mohamed Aslam ◽  
Azhar Harun
Keyword(s):  
Economic Growth ◽  
Human Development ◽  
Development Program ◽  
Granger Causality Test ◽  
Development Education ◽  
Causality Test ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
The Impact

Zakat is intended to stimulate economic development, education, social, human resources empowerment, religion health, and insurance programs. The seven programs above are implemented by the Malaysian government to improve economic growth. The aim of the study is to examine the impact zakat on human development program in Malaysia using the Autoregressive Distributed Lag (ARDL) bound testing approach. The analysis was carried out for the period from 1980–2009. The finding of the research reveals that zakat has a positive and significant influence on human development in five state in the short and long run. Zakat in Malaysia can be used as tool of fiscal policy that is decided in the states of Malaysia to stimulate human development and economic growth in the long run. Keyword: Zakat, Human Development, Granger causality test

scholarly journals The Nexus Among Economic Growth, Inflation and Unemployment in Bhutan

2019 ◽  
Vol 20 (1) ◽  
pp. 94-105
Author(s):  
Ugyen Tenzin
Keyword(s):  
Economic Growth ◽  
Unemployment Rate ◽  
Positive Association ◽  
Economic Output ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Employment Elasticity ◽  
The Impact

In order to understand the dynamics of unemployment in Bhutan at a macro-level, this study has explored the association among economic growth, inflation and unemployment from 1998 to 2016. The autoregressive distributed lag (ARDL) model was applied to estimate the impact of economic growth and inflation on unemployment. The results of this empirical analysis suggest that economic growth had no impact on the reduction of unemployment rate in Bhutan both in the short and in the long run. In fact, as the economic growth increased, so did the unemployment rate. However, inflation had a negative association with unemployment rate in the short run and a positive association in the long run. In other words, an increase in the employment rate led to an increase in the inflation in the short run. Likewise, if inflation is not monitored or controlled, the uncertainty of inflation can lead to lower investment and lower economic growth, thereby causing unemployment to rise in the long run. This study, therefore, recommends policymakers to take into account the employment elasticity with respect to economic output and focus on sectors, which have more absorptive capacity in engaging the young labour market entrants. JEL: B22, C22, E24, E31

scholarly journals The impact of minimum wage on unemployment, prices, and growth: A multivariate analysis for Turkey

2019 ◽  
Vol 64 (221) ◽  
pp. 65-83
Author(s):  
Biçerli Kemal ◽  
Merve Kocaman
Keyword(s):  
Error Correction ◽  
Minimum Wage ◽  
Causality Test ◽  
Producer Price ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Turkish Economy ◽  
Short Run ◽  
The Impact

The aim of this study is to research the impact of minimum wage on unemployment, prices, and growth for the Turkish economy. The data used is monthly and covers the period from January 2005 to March 2017. The producer price index represents prices and the industrial production index represents growth. The Autoregressive Distributed Lag (ARDL) model is used to see the effect of the minimum wage on these variables. An error-correction based Granger causality test is then conducted to see short-run and long-run causalities. The bounds test yields evidence of a long-run relationship between variables. The obtained ARDL results also show that while the minimum wage has a statistically significant effect on unemployment and prices, it does not have a statistically significant effect on production. While there is short-run causality from minimum wage to prices only, the obtained significant error correction terms indicate long-run causality for all of the variables. Consequently, the minimum wage plays a significant role in increasing prices and the number of unemployed people in Turkey.

scholarly journals Causality Between Public Debt, Public Debt Service and Economic Growth in an Emerging Economy

2020 ◽  
Vol 65 (1) ◽  
pp. 1-19
Author(s):  
Talknice Saungweme ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Public Debt ◽  
Debt Service ◽  
Bounds Testing ◽  
Causality Test ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run

AbstractThis paper explores the causality between public debt, public debt service and economic growth in South Africa covering the period 1970 – 2017. The study employs the autoregressive distributed lag (ARDL) bounds testing approach to cointegration and the multivariate Granger-causality test. The empirical results indicate that there is unidirectional causality from economic growth to public debt, but only in the short run. However, the study fails to establish any causality between public debt service and economic growth, both in the short run and long run. In line with the empirical evidence, the study concludes that it is economic growth that drives public debt in South Africa, and that the causal relationship between public debt and economic growth is sensitive to the timeframe considered. The paper recommends policymakers in South Africa to consider growth-enhancing policies in the short run, since poor economic performances may lead to high public debt levels.

scholarly journals Electricity Consumption and Economic Growth in Jordan: Bounds Testing Cointegration Approach

2016 ◽  
Vol 12 (1) ◽  
pp. 429
Author(s):  
Al-Abdulrazag A. Bashier
Keyword(s):  
Economic Growth ◽  
Strong Support ◽  
Electricity Consumption ◽  
Bounds Testing ◽  
Causality Test ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Short Run

The objective of this paper is to investigate the short-run and longrun causal relationships between electricity consumption and economic growth in Jordan between 1976 and 2013, utilizing the Autoregressive Distributed Lag (ARDL) model. Estimates revealed the existence of a longrun equilibrium relationship between the said variables. The VECM model results indicated a long-run, bidirectional causality between the two variables as seen from the negative and significant error correction terms. The results of Granger-Causality test within VECM disclosed a bidirectional weak and strong short-run causality between electricity consumptions per capita and economic growth. The estimation results provide a strong support for the feedback hypothesis in Jordan

scholarly journals The Impact of Output Volatility on CO2 Emissions in Turkey: Testing EKC Hypothesis with Fourier Stationarity Test

2021 ◽  
Author(s):  
Murat Can Genç ◽  
Aykut Ekinci ◽  
Burchan Sakarya
Keyword(s):  
Economic Growth ◽  
Kuznets Curve ◽  
Output Volatility ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Real Gdp ◽  
Long Run ◽  
Short Run ◽  
Stationarity Test ◽  
The Impact

Abstract This study uses the environmental Kuznets curve (EKC) approach to determine the dynamic short- and long-term impacts of the volatility of economic growth (VOL) on carbon dioxide (CO2) emissions in Turkey from 1980 to 2016. The results of the Autoregressive Distributed Lag (ARDL) approach indicate that there is a long-run relationship between CO2, per capita real GDP, and VOL. The coefficients obtained from the ARDL estimation indicate that economic growth increases CO2 emissions, but VOL decreases CO2 emissions in the long run. However, the coefficients obtained from the ARDL error correction model show that VOL increases CO2 emissions in the short run. We also find that the EKC is valid in Turkey.

scholarly journals The Asymmetric Impact of Oil Price and Electricity Consumption on Economic Growth: Evidence from Nigeria

2021 ◽  
Vol 9 (1) ◽  
pp. 50-70
Author(s):  
Adedayo Emmanuel Longe ◽  
Taiwo Matthew Adekoya ◽  
Caleb Olugbenga Soyemi ◽  
David Adeiza Agbanuji ◽  
Idowu Jacob Adekomi
Keyword(s):  
Economic Growth ◽  
Electricity Consumption ◽  
Capital Formation ◽  
Oil Price ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Asymmetric Impact ◽  
The Impact

Abstract The study examines the asymmetric impact of oil price and electricity consumption on economic growth in Nigeria between 1981 and 2018 using the Non-Linear Autoregressive Distributed Lag (NARDL) model. Results reveal that falling and increasing oil prices as well as gross capital formation affect economic growth in Nigeria negatively and significantly in the short-run, while electricity consumption affects economic growth positively and significantly in the short-run. In the long-run, the impact on economic growth of negative changes in oil price is negative and insignificant, while positive changes in oil price have a positive but insignificant impact on economic growth. The impact on the economic growth of electricity consumption remains positive but insignificant while that of gross capital formation is positive and significant. The results suggest that both in the short and the long run positive changes in oil price have greater impact on the economic growth than negative oil price changes. Capital formation is a significant determinant of Nigerian economic growth both in the short and the long run.

scholarly journals Ageing Population's Impact on Economic Growth in Malaysia From 1981 to 2019: Evidence From an Autoregressive Distributed Lag Approach

2021 ◽  
Vol 9 ◽  
Author(s):  
Siti Nur Ain Mohd ◽  
Ayunee Anis Ishak ◽  
Doris Padmini Selvaratnam
Keyword(s):  
Economic Growth ◽  
Series Data ◽  
Ageing Population ◽  
Age Dependency ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Population Variable ◽  
Short Run ◽  
The Impact

This study investigates the impact of the ageing population on the economic growth for short- and long-run estimations in Malaysia, by using time series data from 1981 to 2019. This study adopts the autoregressive distributed lag (ARDL) method with the Bound test approach for the long-run estimation and the vector error correction model for the short-run estimation. Several econometric diagnostic tests were applied for validation and the appropriate model specification basis. The estimated result of this work indicates that the age dependency ratio proxy for the ageing population variable has a significant negative impact on economic growth in Malaysia. A 1% increase in old age dependency will decline gross domestic product's (GDP's) growth by an average of 6.6043% at the 5% level of significance. Hence, an increase in the ageing population will impede economic growth. Although controlled variables (e.g., physical capital, labour participation, and human capital) have a significant positive impact on economic growth in Malaysia, there is evidence of a long- and short-run relationship between economic growth and the ageing population variable, and also the control variable.

scholarly journals The Impact of Saving and Financial Development on Economic Growth in Turkey

2019 ◽  
Vol 11 (2) ◽  
pp. 1
Author(s):  
Hatem Hatef Abdulkadhim Altaee ◽  
Mohamed Khaled Al-Jafari
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Time Series Data ◽  
Series Data ◽  
Domestic Saving ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
The Impact

Since saving and financial development are vital to economic growth, this research empirically investigates the impact of saving and financial development on economic growth in Turkey. Therefore, a time series data from 1968 until 2017 were tested utilizing both the error correction model (ECM) and the autoregressive distributed lag approach (ARDL). The findings reveal an existence of a short-run and a long-run positive and significant effect of savings and financial development on economic growth. Conventional inputs such as capital and labor proved to be the most important factors in achieving economic growth in Turkey. The study concludes that an appropriate policy mix will enhance domestic saving in the country.

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