scholarly journals The Relationship Between Public Expenditure and Economic Growth In Kosovo: Findings from a Johansen Co-Integrated Test and a Granger Causality Test

Ekonomika ◽  
2018 ◽  
Vol 97 (1) ◽  
pp. 47-62 ◽  
Author(s):  
Leke Pula ◽  
Alban Elshani
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Public Expenditure ◽  
Time Series Data ◽  
Granger Causality Test ◽  
Series Data ◽  
Causality Test ◽  
Total Budget ◽  
The Relationship ◽  
Budget Revenue

In the scientific literature, there are two opposing views on the relationship between public expenditure and economic growth. The Keynesian view states that public expenditure is an exogenous factor that influences economic growth and can be used as a policy instrument. This point of view is in contrast to the Wagner view that the public expenditure is seen as an endogenous factor or an outcome, not a cause, of economic growth. The primary objective of this study is to test the views of Keynes’s versus Wagner’s in the case of Kosovo by using Public Expenditure (G), Gross Domestic Product and three other components of GDP: Foreign Direct Investment (FDI), Export (EXP) and Total Budget Revenue (TRtax); the variables used in this analysis are quarterly time series data spanning from 2004–2016. To accomplish the set objectives, the Johansen co-integrated technique is used to investigate the long-run relationship between public expenditure and economic growth, while the Granger causality test is used to know the direction of flow between variables. This study discovers that there is a unidirectional causality between government expenditures and economic growth in Kosovo. It is also found that there is a bidirectional causality between total budget revenue and public expenditure. On the other hand, results also provide evidence that there is a bidirectional causality between export and economic growth. Moreover, the results for Kosovo indicate that data for the period considered support the Keynesian view.

scholarly journals An Econometric Analysis on Remittance and Economic Growth in Bangladesh

2020 ◽  
pp. 214-218
Author(s):  
Md Shafiul Islam
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Granger Causality ◽  
Time Series Data ◽  
Granger Causality Test ◽  
Causal Link ◽  
Series Data ◽  
Causality Test ◽  
External Finance ◽  
The Relationship

In Bangladesh, migrant worker’s remittances constitute one of the most significant sources of external finance. This paper investigates the existence of relation between remittance inflow and GDP and the causal link between them in Bangladesh by employing the Granger causality test under a VECM framework. Using time series data over a 38 year period, we found that growth in remittances does lead to economic growth in Bangladesh. In addition to the relationship, this paper also points out some issues that are working as impediments in getting remittance and give some recommendations to overcome those impediments.

scholarly journals Export, Energy Consumption and Economic Growth Inter-Linkages: The Case of Lithuania

2017 ◽  
Vol 64 (3) ◽  
pp. 395-410 ◽  
Author(s):  
Gitana Dudzevičiūtė ◽  
Agnė Šimelytė
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Granger Causality ◽  
Time Series Data ◽  
Granger Causality Test ◽  
Series Data ◽  
Causality Test ◽  
Data Set ◽  
Policy Makers ◽  
Future Policy

Abstract This paper has aimed to examine the causal relationships between energy consumption – economic growth, export – energy consumption and export – economic growth in Lithuania during the period of 1998 – 2015. Descriptive statistics analysis and econometric techniques have been applied for this purpose. Granger causality test has been used to a time series data set to determine the causality between variables. The results of Granger causality test have shown unidirectional causality running from GDP to energy consumption, from export to GDP and from export to energy consumption. It is obvious that GDP and export play significant roles in accelerating energy consumption in Lithuania. The determination of the causal links between energy consumption – economic growth, export – economic growth and energy consumption – export has provided policy makers with the main insights to formulate future policy directions for sustainable economic development in Lithuania.

scholarly journals Exploring the linkages of Foreign Direct Investment in Spain since 1970’s: an ARDL approach

2020 ◽  
Vol 33 (1) ◽  
pp. 39-54
Author(s):  
Verónica Cañal Fernández ◽  
Julio Tascón Fernández ◽  
María Gómez Martín
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Granger Causality ◽  
Direct Investment ◽  
Time Series Data ◽  
Series Data ◽  
Bounds Testing ◽  
Causality Test ◽  
Long Run ◽  
The Relationship

This paper analyzes the relationship between foreign direct investment (FDI), exports and economic growth in Spain using annual time series data for the period 1970 to 2016. To examine these linkages the autoregressive distributed lag (ARDL) bounds testing approach to cointegration for the long-run is applied. The results confirm a long-run relationship among the examined variables. The Granger causality test indicates a strong unidirectional causality between FDI and exports with direction from FDI to exports. Besides, the results for the relationship between FDI and economic growth are interesting and indicate that there is no significant Granger causality from FDI to economic growth and vice-versa.

Cointegration and Causality between Disaggregated Exports and Economic Growth in ASEAN-4 Nations

2021 ◽  
Vol 12 (3) ◽  
pp. 633-645
Author(s):  
Shahrun Nizam Abdul-Aziz Et.al
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Time Series Data ◽  
Granger Causality Test ◽  
The Philippines ◽  
Series Data ◽  
Causality Test ◽  
Long Run ◽  
Short Run ◽  
Manufactured Exports

This study aimed to examine the relationship between ASEAN-4’s disaggregates exports (i.e., manufactured and primary exports) and economic growth by utilising the time series data over the period from 1982 to 2017. The Johansen-Juselius multivariate procedure was performed to determine the existence of the long-run relationship between variables, while the Granger causality test within VECM was applied to analyse the long-run and short-run causal directions. Prior to that, the unit root test was conducted to examine the series properties of the variables. The empirical results from the Johansen and Juselius Multivariate Cointegration test revealed that there were long-run equilibrium relationships among variables, while the Granger causality test based on VECM found that the ELG hypothesis for manufactured exports was valid for Indonesia in the long-run and short-run, while in the Philippines this hypothesis was only valid for the short-run. On the other hand, in the case of Malaysia and Thailand, both ELG and GLE hypotheses were valid in both long-run and short-run. For each ASEAN-4 nation the results also revealed that physical capital indirectly caused economic growth via the manufactured exports. Nevertheless, in the case of Malaysia and Thailand, it seemed that the reserve effect was likely to happen whereby the economic growth caused the growth of manufactured exports through the increase of the national production. The growth of the manufactured exports due to the reverse effect in turn caused the demand for imports to increase, particularly the imports of intermediate products. As far as the primary exports were concerned, the ELG hypothesis was valid for Thailand in both long-run and short-run, while for Malaysia and Indonesia, this hypothesis was valid respectively in the long-run and short-run. For Thailand, Indonesia and Malaysia, it appeared that in the short run, human capital indirectly stimulated economic growth via primary exports.

The relationship between financial development and economic growth in Eswatini (formerly Swaziland)

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Siphe-okuhle Fakudze ◽  
Asrat Tsegaye ◽  
Kin Sibanda
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Financial Development ◽  
Granger Causality Test ◽  
Causality Test ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
The Relationship

PurposeThe paper examined the relationship between financial development and economic growth for the period 1996 to 2018 in Eswatini.Design/methodology/approachThe Autoregressive Distributed Lag bounds test (ARDL) was employed to determine the long-run and short-run dynamics of the link between the variables of interest. The Granger causality test was also performed to establish the direction of causality between financial development and economic growth.FindingsThe ARDL results revealed that there is a long-run relationship between financial development and economic growth. The Granger causality test revealed bidirectional causality between money supply and economic growth, and unidirectional causality running from economic growth to financial development. The results highlight that economic growth exerts a positive and significant influence on financial development, validating the demand following hypothesis in Eswatini.Practical implicationsPolicymakers should formulate policies that aims to engineer more economic growth. The policies should strike a balance between deploying funds necessary to stimulate investment and enhancing productivity in order to enliven economic growth in Eswatini.Originality/valueThe study investigates the finance-growth linkage using time series analysis. It determines the long-run and short-run dynamics of this relationship and examines the Granger causality outcomes.

scholarly journals Government Expenditure and Economic Growth in South Africa: A Vector Error Correction Modelling and Granger Causality Test

2017 ◽  
Vol 9 (4) ◽  
pp. 164
Author(s):  
Kagiso Molefe ◽  
Ireen Choga
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Error Correction ◽  
Granger Causality ◽  
Time Series Data ◽  
Government Expenditure ◽  
Series Data ◽  
Vector Error Correction ◽  
Vector Error ◽  
The Relationship

Previous studies generally find mixed empirical evidence on the relationship between government spending and economic growth. This study re-examine the relationship between government expenditure and economic growth in South Africa for the period of 1990 to 2015 using the Vector Error Correction Model and Granger Causality techniques. The time series data included in the model were gross domestic Product (GDP), government expenditure, national savings, government debt and consumer price index or inflation. Results obtained from the analysis showed a negative long-run relationship between government expenditure and economic growth in South Africa. Furthermore, the estimate of the speed of adjustment coefficient found in this study has revealed that 49 per cent of the variation in GDP from its equilibrium level is corrected within of a year. Furthermore, the study discovered that the causality relationship run from economic growth to government expenditure. This implied that the Wagner’s law is applicable to South Africa since government expenditure is an effect rather than a cause of economic growth. The results presented in this study are similar to those in the literature and are also sustained by preceding studies.

An Empirical Analysis on the Relationship between Transport Infrastructure and Economic Growth in Tianjin

2012 ◽  
Vol 253-255 ◽  
pp. 278-281
Author(s):  
Xiao Zhe Meng
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Granger Causality ◽  
Empirical Analysis ◽  
Time Series Data ◽  
Transport Infrastructure ◽  
Integration Theory ◽  
Series Data ◽  
Positive Correlations ◽  
The Relationship

Transport infrastructure makes important contribution to economic growth. At the same time, the economic growth provides support to the transport infrastructure. Based on the co-integration theory and Granger casualty analysis, using time series data in Tianjin from 1978 to 2010, empirically analyze the co-integration relationship and Granger causality between the index of all kinds of transport infrastructure and the GDP in Tianjin. Research shows that there are positive correlations between the length of road, railway, quay line and GDP. The length of road, railway and quay line is the Granger cause of GDP. However, GDP is not the Granger cause of transport infrastructure.

scholarly journals Granger Causality Between Local Government Expenditure and Economic Growth in Indonesia

2018 ◽  
Vol 3 (4) ◽  
pp. 80-86
Author(s):  
Sri Kurniawati
Keyword(s):  
Economic Growth ◽  
Local Government ◽  
Granger Causality ◽  
Government Expenditure ◽  
Granger Causality Test ◽  
Reciprocal Relationship ◽  
Series Data ◽  
Causality Test ◽  
West Kalimantan ◽  
Integration Test

Objective - This study examines the causal relationship between government expenditure and economic growth in West Kalimantan between 2009 and 2015. This research resulted in the enactment of Wagner's Law and/or Keynes's Theory in West Kalimantan leading the local government to take the right policies as an effort towards improving economic development. Methodology/Technique - By using panel data that combines time series data and cross-site data, it will be estimated by the Granger causality test which begins with a stationary test and co-integration test. Based on the co-integration tests, the results suggest that there is a long-term relationship between government expenditure and economic growth. Meanwhile, based on the Granger causality test, there is no reciprocal relationship between government expenditure and economic growth. Findings - A direct relationship in the form of the influence of government expenditure on economic growth in West Kalimantan. Novelty - These results are in line with the Keynes's Theory through its national income function. Type of Paper: Empirical Keywords: Government Expenditure; Economic Growth; Co-integration; Causality. JEL Classification: F40, F43, F49.

scholarly journals Causal Linkage amongst Public Expenditure on Health, Health Status and Growth: New Empirical Evidence from Toda-Yamamoto Approach for Nigeria

2019 ◽  
pp. 1-13 ◽  
Author(s):  
Stanley Emife Nwani ◽  
Ikechukwu Kelikume
Keyword(s):  
Economic Growth ◽  
Health Status ◽  
National Health ◽  
Health Expenditure ◽  
Public Expenditure ◽  
Time Series Data ◽  
Health Sector ◽  
Series Data ◽  
Causality Test ◽  
Integration Test

This study investigates the causal linkages amongst public expenditure on health, health status and economic growth in Nigeria using the Toda-Yamamoto technique. The choice of the Toda-Yamamoto approach is predicated on its simplicity and the ability to overcome the shortcomings inherent in the conventional causality procedures by producing more robust results through the estimation of the augmented VAR that guarantees the asymptotic distribution of the Wald statistic. To this end, the study collected annual time series data from the Central Bank of Nigeria’s Statistical bulletin and the World Development Indicator on public expenditure on health, life expectancy, infant mortality and real gross domestic product spanning 38 years from 1981 to 2018. The result of the study’s empirical analysis based on the co-integration test indicates that public health expenditure, health status and economic growth have long-run association. Further, the Toda-Yamamoto causality test result reveals the absence of causality between health expenditure and health status. Similarly, health status and economic growth are not causally interdependent. On the basis of the findings, the paper vehemently concludes that efforts to stimulate economic growth by targeting health outcomes improvement through public expenditure will be futile. As such, there is the need to develop better national health policy and programmes such as compulsory national health insurance that is capable of resolving the fundamental problems in the health sector. This would help integrate healthcare into the mainstream of the Nigerian economy.

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