Wagner versus Keynes: the causal nexus between Government Expenditures and Economic Growth: An Empirical study of Burkina Faso

2016 ◽  
Vol 3 (2) ◽  
pp. 74-101 ◽  
Author(s):  
Isaac Kwesi Ampah ◽  
Balázs Kotosz
Keyword(s):  
Burkina Faso ◽  
Developing Economies ◽  
Government Expenditures ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Spending Patterns ◽  
Cointegration Tests ◽  
Causality Tests ◽  
Causal Nexus

AbstractThe spending patterns of governments in the world especially developing economies have changed significantly over the last several decades. The main objective of this paper is analysing the relationship between government expenditures and growth in Burkina Faso’s economy. The study focuses on testing the various versions of Wagner’s hypothesis using the Burkina Faso data between 1960-2015 by an Autoregressive-Distributed Lag (ARDL) model. Cointegration tests, the long-run parameters and causality tests found valid Keynesian and Wagnerian relationship, but results are sensitive to the variable definition; the use of relative and absolute measures, local and international currency leads to a different conclusion.

Electricity Consumption–Economic Growth Nexus: Evidence from ARDL Bound Testing Approach in the Tunisian Context

2020 ◽  
pp. 097215092092543 ◽  
Author(s):  
Zouheir Mighri ◽  
Hanen Ragoubi
Keyword(s):  
Economic Growth ◽  
Electricity Consumption ◽  
Bounds Testing ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Causality Tests ◽  
Short Run ◽  
Testing Approach ◽  
Causal Nexus

This article investigates the causal nexus between electricity consumption and economic growth in Tunisia for the period 1971–2013 by using autoregressive distributed lag (ARDL) bounds testing approach of cointegration and Granger causality tests. The empirical findings indicate the existence of a long-term relationship between electricity consumption and economic growth. Besides, they support the conservation hypothesis in the long run, while they confirm the growth hypothesis in the short run.

scholarly journals International Real Estate Review

2021 ◽  
Vol 24 (2) ◽  
pp. 221-251
Author(s):  
Henry Koon Nam Lee ◽  
Keyword(s):  
Emerging Market ◽  
Residential Property ◽  
Developed Economies ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Expected Inflation ◽  
Long Run ◽  
Cointegration Tests ◽  
Residential Properties ◽  
Show Evidence

Using a non-causality approach based on the conventional approach of Fama and Schwert (1977), cointegration method in Johansen (1988), and autoregressive distributed lag (ARDL) cointegration technique in Pesaran et al. (2001) and Granger et al. (2000), this study examines the inflation hedging effectiveness of residential property in three of the largest emerging market (EM) economies: China, India and Russia. While the results of the Fama and Schwert (1977) regression indicate that residential properties in China and Russia provide a short-term hedge against expected inflation, this is not the case for those in India against both expected and unexpected inflation. Consistent with the results of the developed economies, the Johansen and ARDL cointegration results provide strong evidence to support the hypothesis that inflation and the residential properties in the three largest EM economies are cointegrated. This implies that the residential properties in these three countries provide a long-term hedge for inflation. In addition, the causality results show evidence that inflation has a lead effect on residential property prices in India over the long run. The empirical results of the cointegration tests confirm that residential properties could be considered as a reliable hedge against inflation for EMs in the long run and suggest that investors should overweigh their investment in residential property assets during periods of persistent inflation in EMs.

THE EFFECTS OF FINANCIAL DEVELOPMENT ON INVESTMENT IN TURKEY

2016 ◽  
Vol 61 (04) ◽  
pp. 1650002 ◽  
Author(s):  
MEHMET BALCILAR ◽  
SERHAN ÇIFTÇIOĞLU ◽  
HASAN GÜNGÖR
Keyword(s):  
Financial Development ◽  
Composite Index ◽  
Investment Decisions ◽  
Budget Balance ◽  
Bounds Testing ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Causality Tests ◽  
Bounds Testing Approach

Analyzing financial development and investment in Turkey between 1960 and 2008, this paper illustrates how financial development affects investment decisions in a dynamic model of the firm under financial frictions. A composite index is constructed of three alternative financial development measures. The bounds testing approach was used to test for the existence of long-run levels relationships and long-run levels relationships were estimated using the autoregressive distributed lag method. Both short- and long-run causality tests were performed. Results indicate that financial development, budget balance, and total credit to the private sector positively and significantly affect investment.

Electricity consumption and economic growth

2020 ◽  
Vol 14 (1) ◽  
pp. 1-19 ◽  
Author(s):  
Themba G. Chirwa ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Developing Economies ◽  
Electricity Consumption ◽  
Content Type ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Homogeneity Assumption ◽  
Long Run ◽  
Study Results ◽  
Short Run

Purpose This paper aims to examine the short- and long-run relationship between electricity consumption and economic growth. Design/methodology/approach The study uses a panel-based autoregressive distributed lag approach to cointegration to investigate this relationship in 12 advanced, emerging markets and developing economies during the period 1970-2016, selected from three continents, namely, Europe (Luxemborg, Norway, Denmark and Belgium), Asia (Singapore, Japan, Indonesia and India) and Africa (South Africa, Algeria, Egypt and Kenya). Findings Based on the homogeneity assumption, the study results reveal that electricity consumption is positively and significantly associated with economic growth in all the study countries in the long run. Conversely, the short-run results reveal that electricity consumption is positively and significantly associated with economic growth in ten countries and negatively associated with economic growth in only two countries. Research limitations/implications The study concludes that, on the whole, electricity consumption is an important factor of production in the majority of the study countries. Therefore, policymakers should focus on growth-enhancing energy policies that promote energy efficiency usage, especially in the long run. Originality/value The authors hereby confirm that the paper has not been published elsewhere, and this research is entirely their work.

scholarly journals Revisiting the Dynamics of the Fiscal Deficit and Inflation in India: the Nonlinear Autoregressive Distributed Lag Approach

2021 ◽  
Vol 17 (1) ◽  
pp. 318-328
Author(s):  
Vishal Sharma ◽  
Ashok Mittal
Keyword(s):  
Price Level ◽  
Developing Economies ◽  
Fiscal Deficit ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Reserve Bank ◽  
Selection Of Variables ◽  
Government Deficit ◽  
Nonlinear Autoregressive

The chronic government deficit (fiscal deficit) and increase in the price level (inflation) have become major concerns for economists and policymakers. While numerous studies have examined the twin problems of the fiscal deficit and inflation for both developed and developing economies, their results are inconclusive due to different estimation techniques, chosen time periods, selection of variables, etc. Therefore, we examined the fiscal deficit-inflation nexus in India for the period from 1980–81 to 2016–17 by employing the Autoregressive Distributed Lag (ARDL) and Nonlinear Autoregressive Distributed Lag (NARDL) approaches. The results of the ARDL approach found no evidence of linear relationship between fiscal deficit and inflation in the Indian context. Further, the empirical findings of the NARDL model confirmed the nonlinear relationship between fiscal deficit and inflation in the long run and no association between money supply and inflation, supporting the ideas of the Fiscal Theory of the Price Level (FTPL) in the case of India. FTPL postulates that public debt and taxation policies drive price level; monetary policy has an indirect role only. Therefore, fiscal policymakers should focus on reducing fiscal deficits. Simultaneously, the Reserve Bank of India (RBI) should regulate lending interest rate so that a mix of fiscal and monetary policies can be applied for controlling inflation in India.

Macro-Economic Disequilibrium and Educational Development in Nigeria between 1980-2017

2019 ◽  
Vol 10 (08) ◽  
pp. 20592-21600
Author(s):  
Gbadebo Salako ◽  
Adejumo Musibau Ojo ◽  
Jaji Ayobami Francis
Keyword(s):  
Time Series Data ◽  
Educational Development ◽  
Negative Relationship ◽  
Series Data ◽  
Explanatory Variables ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Stationarity Test ◽  
Level I

This study empirically investigates the effects of macroeconomic disequilibrium on educational development in Nigeria. The study employed time series data between 1980 and 2017. Autoregressive Distributed Lag method of estimation was employed. The result revealed that the variables stationarity test were mixed between the first difference I(I) and level I(0). The cointegration result shows that there exist long run relationship between the variables. The result revealed that Balance of payment, Poverty, Debt rate inflation and unemployment exhibited negative relationship with educational development. The estimation result showed that all explanatory variables account for 88% variation of educational development in Nigeria. It is therefore recommended that government should fast track policies that can stabilize inflation and exchange rate in the country. Also, Policies must be formulated to reduce poverty and unemployment.

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

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

An Empirical Analysis of Aggregate Import Demand Function for India

2017 ◽  
Vol 17 (4) ◽  
pp. 20170049
Author(s):  
Bibhuti Ranjan Mishra ◽  
Asit Mohanty
Keyword(s):  
Foreign Exchange ◽  
Demand Function ◽  
Import Demand ◽  
Likelihood Method ◽  
Domestic Activity ◽  
Relative Prices ◽  
Distributed Lag ◽  
Long Run ◽  
Cointegration Tests ◽  
The Stability

This paper examines the behaviour of Indian aggregate imports during the period 1980–81 to 2013–14. The stability of aggregate import demand function is examined using five types of cointegration tests including the ARDL bounds test. In order to estimate the long-run elasticities, we have applied three alternative fully efficient cointegrating regressions, autoregressive distributed lag (ARDL) model and Johansen maximum likelihood method. Our results reveal cointegration relationship between import demand, relative prices of import, domestic activity and foreign exchange reserves. Results evince that, in the long-run, the response of import demand to relative import prices is negative and less than unity, whereas it’s response to domestic activity/income is positive and more than unity. The foreign exchange reserve has a positive effect on imports.

scholarly journals Financial innovation and economic growth: evidence from Zimbabwe

2016 ◽  
Vol 13 (2) ◽  
pp. 65-75 ◽  
Author(s):  
Alex Bara ◽  
Calvin Mudzingiri
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Time Series Data ◽  
Financial Time Series ◽  
Financial Innovation ◽  
Dark Side ◽  
Series Data ◽  
Distributed Lag ◽  
Long Run ◽  
Causality Tests

The role of financial innovation on economic growth in developing countries has not been actively pursued. Stemming from the finance-growth nexus, literature suggests that financial innovation has a relationship to growth, which could be either positive or negative. Implicitly, financial innovation has a good and a dark side that affects growth. This study establishes the causal relationship between financial innovation and economic growth in Zimbabwe empirically. Using the Autoregressive Distributed Lag (ARDL) bounds tests and Granger causality tests on financial time series data of Zimbabwe for the period 1980-2013, the study finds that financial innovation has a relationship to economic growth that varies depending on the variable used to measure financial innovation. A long-run, growth-driven financial innovationis confirmed, with causality running from economic growth to financial innovation. Bi-directional causality also exists after conditionally netting-off financial development. Policies that enhance economic growth inter-twined with financial innovation are essential, if developing countries, such as Zimbabwe, aim to maximize economic development

scholarly journals The Determinants of Food Prices in Pakistan

2012 ◽  
Vol 17 (1) ◽  
pp. 101-128 ◽  
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.

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