scholarly journals Unlocking Pakistan’s Revenue Potential

2018 ◽  
Vol 7 (1) ◽  
pp. 17-36
Author(s):  
Serhan Cevik
Keyword(s):  
Economic Activity ◽  
Instrumental Variable ◽  
Significant Variation ◽  
Tax Revenue ◽  
Correction Model ◽  
Long Run ◽  
Short Run ◽  
Fiscal Space ◽  
Revenue Administration ◽  
Identification Strategy

Pakistan’s tax revenue remains low relative to comparator countries and the tax effort expected for the country’s level of development. This creates significant challenges in providing the much-desired fiscal space to expand growth-enhancing expenditure on infrastructure, education, health care and targeted social assistance. This article estimates both short-run and long-run elasticities of tax revenue in Pakistan over the period 1960–2015 to better understand the evolution of tax revenue in the context of changing economic activity, using a novel identification strategy based on the instrumental variable (IV) approach and an error correction model (ECM) to address concerns about the potential endogeneity of tax revenue and economic growth. The empirical results indicate that both short-run and long-run elasticities of tax revenue are slightly above 1 over the sample period. There is, however, significant variation in short-run and long-run elasticities across subcategories of tax revenue. These findings underscore the need for a concerted agenda of comprehensive reforms at federal and provincial levels aimed at broadening tax bases, strengthening revenue administration and taxpayer compliance, eliminating distortionary and overgenerous tax concessions and exemptions, and rationalizing tax policy in an efficient and equitable manner. JEL: C23, C32, E62, H2, H62, H68

scholarly journals Analysis of Indonesian Tax Revenue

2017 ◽  
Vol 1 (01) ◽  
pp. 71
Author(s):  
Amalia Wijayanti ◽  
Firmansyah Firmansyah
Keyword(s):  
Exchange Rate ◽  
Error Correction ◽  
Government Spending ◽  
Inflation Rate ◽  
Correction Term ◽  
Error Correction Model ◽  
Tax Revenue ◽  
Correction Model ◽  
Long Run ◽  
Short Run

<p>This study analyzes the long-run and short-run effect of macroeconomic factors, such as real Gross Domestic Product (GDP), inflation rate, exchange rate and government spending on Indonesia’s tax revenue during 1976-2013, by utilizing the Error Correction Model (ECM). The finding of the study demontrates that in the long-run; the real GDP, exchange rate, and government spending affect Indonesia’s tax revenue, except the inflation rate. In short-run, Indonesia’s tax revenue statisically affected by government spending, while others variable do not influence Indonesia’s tax revenue. Error Correction Term (ECT) coefficient is 0.221, explains incompatibility tax revenue occur in long-run is corrected of 22 percent in one period.</p><p><br />JEL Classification: E01, E20, H20<br />Keywords: Error Correction Model, Macroeconomic, Tax revenue</p>

scholarly journals Dynamics of Public Policy on Economic Activity: The Case of Pakistan

2020 ◽  
Vol 4 (2) ◽  
pp. 230-241
Author(s):  
Saima Shafique ◽  
M. Mansoor Ali ◽  
Anwar-ul Mujahid Shah ◽  
Seema Zubair
Keyword(s):  
Economic Activity ◽  
Government Expenditures ◽  
Tax Revenue ◽  
Aggregate Output ◽  
Long Run ◽  
Short Run ◽  
Tax Shocks ◽  
Vector Auto Regression ◽  
Auto Regression ◽  
Structural Vector

The unanticipated domestic and international changes in conjunction with policy discretion become reason for shocks to overall economy that affect overall economic growth. Based on methodology by Blanchard and Perotti (2002) the study used timing of fiscal decisions in a Structural Vector Auto-Regression (SVAR) to map dynamics of shocks due to tax revenue, government expenditures and aggregate output in Pakistan. When tax decisions precede expenditure decision, the tax shocks have a volatile short run impact causing expenditures to sharply adjust. Expenditure shocks persistently increase tax revenues and government expenditures. But in the second specification, expenditure shocks reduce the tax revenue and aggregate output that reverts to equilibrium only in the long run. The response of output shocks is almost identical for both the scenarios. Therefore, growth in output increases taxes collection in Pakistan enabling better management of burden of debt and deficit.

scholarly journals Fiscal Impact of Foreign Aid in Morocco: A Multivariate Cointegration Analysis

2018 ◽  
Vol 4 (4) ◽  
pp. 378
Author(s):  
Kawthar Aghoutane ◽  
Mohamed Karim
Keyword(s):  
Foreign Aid ◽  
Cointegration Analysis ◽  
Tax Revenue ◽  
Fiscal Impact ◽  
Correction Model ◽  
Model Following ◽  
Long Run ◽  
Short Run ◽  
The Relationship

<p><em>The aim of this study is to evaluate the relationship between foreign aid and taxe revenue in Morocco by using the Error Correction Model Following the approach of Johansen to jointly capture the long-run relationship and short-run dynamics between aid and tax revenue. Other variables such as the shares of agriculture and industry in GDP, exports, imports and GDP are also included in the model. The results indicate that </em><em>the direct effect of foreign aid on tax revenue is insignificant in the short term</em><em>, but it becomes negative and significant in the long term.</em></p>

scholarly journals The Short-Run and Long-Run Relationships between Mortality and the Business Cycle in Canada

2013 ◽  
Vol 2013 ◽  
pp. 1-11 ◽  
Author(s):  
Zuzana Janko ◽  
J. C. Herbert Emery ◽  
Pierre Guenette
Keyword(s):  
Business Cycle ◽  
Economic Activity ◽  
Negative Relationship ◽  
Death Rates ◽  
Correction Model ◽  
Unemployment Rates ◽  
Long Run ◽  
Short Run ◽  
The Business Cycle ◽  
The Relationship

This paper investigates the relationship between health and the business cycle for the Canadian economy. The majority of existing literature shows a procyclical relationship between death rates and indicators of the business cycle, suggesting that recessions are good for one’s health. We use a time series error correction model to determine the short-run and long-run impacts of the unemployment rates on death rates. Our results indicate that temporary slowdowns in economic activity are associated with lower death rates. Moreover, once we stratify the data by sex, we find a long-run negative relationship between the unemployment rate and death rates for both sexes.

ANALISIS PENGARUH EKSPOR TERHADAP PERTUMBUHAN EKONOMI INDONESIA

2017 ◽  
Vol 11 (1) ◽  
pp. 1-20
Author(s):  
Ari Mulianta Ginting
Keyword(s):  
Economic Growth ◽  
Export Performance ◽  
Descriptive Analysis ◽  
Correction Model ◽  
Administration System ◽  
Long Run ◽  
Short Run ◽  
Available Information ◽  
Increasing Trends ◽  
The Relationship

Ekspor merupakan salah satu faktor terjadinya peningkatan pertumbuhan ekonomi suatu negara, sejalan dengan hipotesis export-led growth (ELG). Penelitian ini menganalisis perkembangan ekspor dan pertumbuhan ekonomi Indonesia periode kuartal I 2001 sampai dengan kuartal IV 2015. Penelitian ini menggunakan analisis deskriptif dalam menggambarkan perkembangan pertumbuhan ekonomi serta ekspor dan analisis kuantitatif metode Error Correction Model (ECM) dalam menganalisis efek jangka panjang dan jangka pendek dari ekspor terhadap pertumbuhan ekonomi. Pada periode penelitian, data yang ada menunjukkan bahwa ekspor dan pertumbuhan ekonomi Indonesia sama-sama mengalami peningkatan. Hasil regresi ECM menunjukkan bahwa ekspor memiliki pengaruh yang positif dan signifikan secara statistik terhadap pertumbuhan ekonomi Indonesia, yang mendukung hipotesis bahwa ELG berlaku untuk Indonesia. Berdasarkan hasil penelitian ini, maka untuk mendorong pertumbuhan ekonomi Indonesia diperlukan peningkatan kinerja ekspor Indonesia. Peningkatan kinerja ekspor Indonesia dapat dilakukan dengan berbagai cara, salah satunya adalah dengan perbaikan sistem administrasi ekspor, peningkatan riset dan pengembangan produk Indonesia, peningkatan sarana dan prasarana infrastruktur, stabilitas nilai tukar dan perluasan pasar non tradisional, termasuk perbaikan struktur ekspor komoditas. Export is one of the factors behind the economic growth which is in line with the export-led growth hypotesis (ELG). This research analyzes the relationship between economic growth and export of Indonesia during first quarter of 2001 until fourth quarter of 2015. It employs descriptive analysis to describe export movement and economic growth during the study period and ECM model to analyze the long run and the short run effects of export on the economic growth. The available information indicated that, during the study period, both export and economic growth showed similar increasing trends. The result of the ECM model revealed that export had a positive and statistically significant relationship with the economic growth, supporting the hypotesis of ELG in Indonesia. Hence, to accelerate economic growth, efforts are required to boost the export performance in Indonesia. The Export performance can be increased by several way, such as improving the export administration system, increasing the research and development of Indonesian products, improving the facilities and infrastructure, exchange rate stability and the non-tradisional markets expansion, and including improvement of the export commodity structure.

Enhancing Economic Growth and Government Revenue Generation in Nigeria: The Role of Diaspora Remittances

2021 ◽  
pp. 003464462110256
Author(s):  
Dal Didia ◽  
Suleiman Tahir
Keyword(s):  
Economic Growth ◽  
Parameter Estimates ◽  
Gross Domestic Product Growth ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Short Run ◽  
The Empirical Analysis

Even though remittances constitute the second-largest source of foreign exchange for Nigeria, with a $24 billion inflow in 2018, its impact on economic growth remains unclear. This study, therefore, examined the short-run and long-run impact of remittances on the economic growth of Nigeria using the vector error correction model. Utilizing World Bank data covering 1990–2018, the empirical analysis revealed that remittances hurt economic growth in the short run while having no impact on economic growth in the long run. Our parameter estimates indicate that a 1% increase in remittances would result in a 0.9% decrease in the gross domestic product growth rate in the short run. One policy implication of this study is that Nigeria needs to devise policies and interventions that minimize the emigration of skilled professionals rather than depending on remittances that do not offset the losses to the economy due to brain drain.

scholarly journals Exchange Rates and Monetary Fundamentals: What Do We Learn from Linear and Nonlinear Regressions?

2014 ◽  
Vol 2014 ◽  
pp. 1-14 ◽  
Author(s):  
Guangfeng Zhang
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Correction Model ◽  
Exchange Rate Dynamics ◽  
Long Run ◽  
Exchange Rate Movements ◽  
Short Run ◽  
Us Dollar ◽  
Linear And Nonlinear ◽  
Japanese Yen

This paper revisits the association between exchange rates and monetary fundamentals with the focus on both linear and nonlinear approaches. With the monthly data of Euro/US dollar and Japanese yen/US dollar, our linear analysis demonstrates the monetary model is a long-run description of exchange rate movements, and our nonlinear modelling suggests the error correction model describes the short-run adjustment of deviations of exchange rates, and monetary fundamentals are capable of explaining exchange rate dynamics under an unrestricted framework.

scholarly journals Determinants of Islamic Rural Bank Financing in Indonesia

JEJAK ◽  
2017 ◽  
Vol 10 (2) ◽  
pp. 273-288
Author(s):  
Arif Widodo ◽  
Istianah Asas
Keyword(s):  
Exchange Rate ◽  
Global Financial Crisis ◽  
Positive Impact ◽  
Impulse Response Function ◽  
Third Party ◽  
Correction Model ◽  
Macroeconomic Variables ◽  
Bank Financing ◽  
Long Run ◽  
Short Run

This research is designed to empirically investigate the determinants of Islamic rural banking financing in Indonesia after 2008 global financial crisis covering period 2009.1-2014.12. The methods applied in this research are Error Correction Model (ECM) and VAR/VECM. The results of ECM model demonstrate that the variable third party funds (DPK) and non-performing financing can significantly affect Islamic rural banking financing both in the short run and long run, while Return on Asset (ROA) and Profit-and-loss sharing does not have a significant influence. Islamic rural bank financing, however, was influenced by inflation and exchange rate as the proxy of macroeconomic variables in the short and long run. Furthermore, Impulse Response Function (IRF) and variance decomposition results show that Profit-and-loss sharing (PLS) has the largest positive impact to financing (39.08%), followed by third party fund (19.6%) and inflation (8.9%). While, the variables that contribute to reduce financing are non-performing financing (9.02%), followed by ROA (7.76%) and exchange rate (2.48%).

scholarly journals The dynamic effect of exchange-rate volatility on Turkish exports: Parsimonious error-correction model approach

2015 ◽  
Vol 62 (4) ◽  
pp. 429-451 ◽  
Author(s):  
Erdal Demirhan ◽  
Banu Demirhan
Keyword(s):  
Exchange Rate ◽  
Error Correction ◽  
Exchange Rate Volatility ◽  
Dynamic Effect ◽  
Error Correction Model ◽  
Impulse Response Functions ◽  
Correction Model ◽  
Long Run ◽  
Export Volume ◽  
Short Run

This paper aims to investigate the effect of exchange-rate stability on real export volume in Turkey, using monthly data for the period February 2001 to January 2010. The Johansen multivariate cointegration method and the parsimonious error-correction model are applied to determine long-run and short-run relationships between real export volume and its determinants. In this study, the conditional variance of the GARCH (1, 1) model is taken as a proxy for exchange-rate stability, and generalized impulse-response functions and variance-decomposition analyses are applied to analyze the dynamic effects of variables on real export volume. The empirical findings suggest that exchangerate stability has a significant positive effect on real export volume, both in the short and the long run.

scholarly journals ANALISIS FAKTOR-FAKTOR YANG MEMPENGARUHI INVESTASI DALAM NEGERI DI JAWA TENGAH TAHUN 1980-2002

2007 ◽  
Vol 8 (1) ◽  
pp. 62
Author(s):  
Eni Setyowati ◽  
Siti Fatimah NH
Keyword(s):  
Economic Development ◽  
Development Process ◽  
Research Model ◽  
Domestic Investment ◽  
Correction Model ◽  
Central Java ◽  
Long Run ◽  
Short Run ◽  
Research Benefit ◽  
One Year

Investment is one of important component for sustainable economic development process. The research objective that want achieved is to estimate influence of labour, inflation, PDRB, and interest rate to domestic investment (PMDN) in Central Java. The research benefit was to clarify factors that influenced domestic investment and gave insight and input for local government in formulating economy policy.One of method for analysing long-run and short run influence was by using dynamic model. In this research, model which applied was ENGLE GRANGER ERROR CORRECTION MODEL (EG-ECM) based on granger representation theoremResult of this research indicated that domestic investment one year ago was variable which influenced significantly in short run while rate of interest influenced in long run.

Sign in / Sign up

Export Citation Format

Share Document