The Long-Run Effect of Fiscal Consolidation on Economic Growth: Evidence from Quantitative Case Studies

This study empirically investigates the causal relationship between economic growth and several factors (investment, human capital, trade openness and public debt) in the Eurozone countries, where imbalances persist several years after the financial crisis. The results reveal a long-run relationship between variables and public debt, as investment, human capital and trade openness positively affect growth. On the other hand, there is a negative long-run effect of public debt on growth. Furthermore, the results indicate that there is long-run unidirectional causality running from investment, trade openness and human capital to growth and bidirectional causality between public debt and growth. The overall results reveal that Eurozone countries should base their growth strategies on fiscal consolidation, increasing exports, correcting the use of public investment and improving the quality of human capital, especially in higher education.

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The China-Pakistan Economic Corridor (CPEC): Considering Contemporary Pakistan through Old-Fashioned Economics and Historical Case Studies

THE LAHORE JOURNAL OF ECONOMICS ◽

10.35536/lje.2018.v23.i2.a2 ◽

2018 ◽

Vol 23 (2) ◽

pp. 19-48

Author(s):

Matthew McCartney

Keyword(s):

United States ◽

Economic Growth ◽

Case Studies ◽

Historical Case ◽

Long Run ◽

One Belt One Road ◽

Nineteenth Century United States ◽

United States Mexico ◽

The Impact ◽

Historical Case Studies

As part of the massive One Belt One Road (OBOR) project or ‘New Silk Road’ the governments of China and Pakistan have announced that a significant ‘corridor’ will be constructed in Pakistan. This paper looks in detail at the $46 billion China-Pakistan Economic Corridor (CPEC) package of transport, energy and manufacturing projects and asks how we can analyse the impact of a transformative expansion of infrastructure. This paper draws lessons from various old-fashioned economics including Rostow, Hirschman and others and the historical case studies of transformative infrastructure expansion in the nineteenth century United States, Mexico, Germany and India to explore the conditions under which CPEC could promote sustainable long-run economic growth in Pakistan.

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Forming Sources of Long-run Growth: How to Understand Them?

Voprosy Ekonomiki ◽

10.32609/0042-8736-2014-3-4-20 ◽

2014 ◽

pp. 4-20 ◽

Cited By ~ 10

Author(s):

G. Idrisov ◽

S. Sinelnikov-Murylev

Keyword(s):

Economic Growth ◽

Growth Rate ◽

Economic Policy ◽

Business Cycle ◽

Capital Markets ◽

Productivity Growth ◽

Government Spending ◽

Long Run ◽

Accelerate Growth ◽

Budget Institutions

The paper analyzes the inconsequence and problems of Russian economic policy to accelerate economic growth. The authors consider three components of growth rate (potential, Russian business cycle and world business cycle components) and conclude that in order to pursue an effective economic policy to accelerate growth, it has to be addressed to the potential (long-run) growth component. The main ingredients of this policy are government spending restructuring and budget institutions reform, labor and capital markets reforms, productivity growth.

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Electricity consumption and economic growth in ASEAN

Journal of Emerging Economies and Islamic Research ◽

10.24191/jeeir.v5i2.8801 ◽

2017 ◽

Vol 5 (2) ◽

pp. 16

Author(s):

Ahmad Ghazali Ismail ◽

Arlinah Abd Rashid ◽

Azlina Hanif

Keyword(s):

Economic Growth ◽

Energy Use ◽

Electricity Consumption ◽

Panel Estimation ◽

Real Gdp ◽

Long Run ◽

Bidirectional Relationship ◽

Short Run ◽

Using Data ◽

The Relationship

The relationship and causality direction between electricity consumption and economic growth is an important issue in the fields of energy economics and policies towards energy use. Extensive literatures has discussed the issue, but the array of findings provides anything but consensus on either the existence of relations or direction of causality between the variables. This study extends research in this area by studying the long-run and causal relations between economic growth, electricity consumption, labour and capital based on the neo-classical one sector aggregate production technology mode using data of electricity consumption and real GDP for ASEAN from the year 1983 to 2012. The analysis is conducted using advanced panel estimation approaches and found no causality in the short run while in the long-run, the results indicate that there are bidirectional relationship among variables. This study provides supplementary evidences of relationship between electricity consumption and economic growth in ASEAN.

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Tax revenue, expenditure, and economic growth: An analysis of long-run relationships

Journal of Economic Development ◽

10.24311/jed/2017.24.3.02 ◽

2017 ◽

Vol 24 (3) ◽

pp. 04-26

Author(s):

SU DINH THANH ◽

NGUYEN PHUONG LIEN

Keyword(s):

Economic Growth ◽

Tax Revenue ◽

Long Run

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ANALISIS PENGARUH EKSPOR TERHADAP PERTUMBUHAN EKONOMI INDONESIA

Buletin Ilmiah Litbang Perdagangan ◽

10.30908/bilp.v11i1.185 ◽

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.

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PENGARUH INFRASTRUKTUR SECARA SPASIAL TERHADAP KONVERGENSI PERTUMBUHAN EKONOMI DI INDONESIA

INFO ARTHA ◽

10.31092/jia.v1i1.67 ◽

2017 ◽

Vol 1 ◽

pp. 17-28

Author(s):

Anisa Fahmi

Keyword(s):

Economic Growth ◽

Regional Economics ◽

Developed Countries ◽

Road Infrastructure ◽

Long Run ◽

Catch Up ◽

The Developed Countries ◽

Positive Effect ◽

Neoclassical Growth Theory

Motivated by inter-regional disparities condition that occurs persistently, this study examines the Indonesian economy in the long run in order to know whether it tends to converge or diverge. This convergence is based on the Solow Neoclassical growth theory assuming the existence of diminishing returns to capital so that when the developed countries reach steady state conditions, developing countries will continuously grow up to 'catch-up' with developed countries. Based on regional economics perspective, each region can not be treated as a stand-alone unit,therefore, this study also focuses on the influence of spatial dependency and infrastructure. Economical and political situations of a region will influence policy in that region which will also have an impact to the neighboring regions. The estimation results of spatial cross-regressive model using fixed effect method consistently confirmed that the Indonesian economy in the long term will likely converge with a speed of 8.08 percent per year. Other findings are road infrastructure has a positive effect on economic growth and investment and road infrastructure are spatially showed a positive effect on economic growth. In other words, the investment and infrastructure of a region does not only affect the economic growth of that region but also to the economy of the contiguous regions.

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