Investigating Okun’s Law in Nigeria through the Dynamic Model

2018 ◽  
Vol 9 (6) ◽  
pp. 39-46
Author(s):  
Patrick Olufemi ADEYEYE ◽  
Anthonia T. ODELEYE ◽  
Olufemi Adewale ALUKO
Keyword(s):  
Economic Growth ◽  
Dynamic Model ◽  
Method Of Moments ◽  
Unemployment Rate ◽  
Generalized Method Of Moments ◽  
Output Growth ◽  
Causality Test ◽  
Policy Tool ◽  
Method Of Moments Estimation ◽  
The Relationship

 Unemployment is a persistent challenge for countries, especially the developing ones. Nigeria as a developing country faces a herculean task reducing the increasing spate of joblessness amongst her citizens. Okun’s law explains the relationship between unemployment and economic growth in an economy. This study therefore investigates Okun’s law in Nigeria between 1985 and 2015 through the dynamic model. The generalized method of moments estimation result reveals that that present and past output growth are negatively related to unemployment rate. However, only past output growth has a significant effect on unemployment rate. It also shows that past unemployment rate is significantly and positively associated with present unemployment rate. The Toda-Yamamoto Granger non-causality test finds that there is no causality between unemployment and economic growth. This study presents evidence to partially support Okun’s law of inverse relationship between unemployment and output growth and suggests that promoting economic growth can be a policy tool for reducing unemployment rate in Nigeria. 

Tourism-Led Growth Hypothesis: A New Global Evidence

2017 ◽  
Vol 59 (3) ◽  
pp. 304-311 ◽  
Author(s):  
Chor Foon Tang ◽  
Eu Chye Tan
Keyword(s):  
Economic Growth ◽  
Method Of Moments ◽  
Generalized Method Of Moments ◽  
Political Stability ◽  
Dynamic Panel ◽  
Beneficial Impact ◽  
The Relationship ◽  
Different Levels ◽  
Growth Hypothesis ◽  
Global Evidence

The primary aim of this study is to determine whether the tourism-led growth hypothesis is globally valid by accounting for countries’ income levels and their institutional qualities, against a panel dataset of 167 countries. The institutional qualities referred to are political stability and corruption control. We employ the dynamic panel generalized method of moments (GMM) approach to examine the relationship. It can be inferred from the exercise that tourism positively contributes to economic growth but the effect varies across countries at different levels of income and institutional qualities. Therefore, the effect of tourism on economic growth is contingent on levels of income and institutional qualities of the host tourism countries. Policy initiatives that aim to promote and strengthen institutional qualities should be undertaken for a country to enjoy the beneficial impact of tourism on economic growth and development.

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

2017 ◽  
Vol 24 (03) ◽  
pp. 04-26
Author(s):  
Lien Nguyen Phuong ◽  
Thanh Su Dinh
Keyword(s):  
Economic Growth ◽  
Method Of Moments ◽  
Generalized Method Of Moments ◽  
Tax Revenue ◽  
Dynamic Panel ◽  
Causality Test ◽  
Long Run ◽  
Integration Test ◽  
The Impact

Focusing on the investigation of “long-term” relationship between tax revenue, expenditure, and economic growth, this paper employs the Granger causality test and finds that the linkage between tax revenue and spending is a bi-directional causal correlation. Furthermore, applying Persyn and Westerlund’s (2008) co-integration test allows for corroboration of existence of long-run cointegration linkages among outcome of economy and the three variables. In addition, by adopting two-step system generalized method of moments (SGMM) for a dynamic panel of 82 developed and developing countries during 16-year period (2000–2015), this research demonstrates that the impact of tax revenue and spending is substantial and ambiguous, depending on different groups of economies.

scholarly journals Econometric estimation of the relationship between the unemployment rate and economic growth in Limpopo Province, South Africa

2020 ◽  
Vol 58 (4) ◽  
Author(s):  
Tshephi Kingsley Thaba ◽  
Abenet Belete ◽  
Johannes Jan Hlongwane ◽  
Lesetja Jacob Ledwaba
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Granger Causality ◽  
Unemployment Rate ◽  
Granger Causality Test ◽  
Limpopo Province ◽  
Economic Policies ◽  
Difference Model ◽  
Causality Test ◽  
The Relationship

Abstract. The study aims to estimate empirically the relationship between economic growth and unemployment rate in Limpopo Province of South Africa. The analysis used quarterly data covering the period 2008-2018 which was obtained from Statistics South Africa. The study employed, difference model, dynamic model, and granger causality test for data analysis, in order to consider both, short term and long term possible relationship Based on the difference model estimation of the coefficient was done and the coefficient was found to be -0.22. From Granger causality test, causal relationship between these two variables doesn’t exist meaning that change in the growth rate of real GDP doesn’t cause change in the rate of unemployment and vice-versa. Inapplicable of the law indicates that a cyclical recovery will not be accompanied by reduction of unemployment. Furthermore, this might reflect the sizable structural and/or frictional component of unemployment in Limpopo Province. Lastly, the country's economic policies have not been suitable for fostering development that can reduce unemployment and this could be due to lack of appropriate composition of public sector and private sector.

scholarly journals Relationship Among Institutional Quality, Tax Revenue and Economic Growth at Provincial Level: Evidence from Vietnam

2016 ◽  
Vol 6 (9) ◽  
pp. 228-239
Author(s):  
Lien, Nguyen Phuong
Keyword(s):  
Economic Growth ◽  
Method Of Moments ◽  
Institutional Quality ◽  
Tax Revenue ◽  
Quality Indices ◽  
Method Of Moments Estimation ◽  
Generalised Method Of Moments ◽  
The Relationship ◽  
Estimation Models

To investigate the relationship among institutional quality, tax revenue, and economic growth in Vietnam, this work applies the Granger test for a panel data of 60 provinces in Vietnam during the period 2006 - 2014. In addition, using the two-step system generalised method of moments estimation supports this study to evaluate the degree of impact of interaction between quality of institutions and tax revenue on economic growth in more detail. The results provide a bi-direction causal linkage among the mentioned variables and discover that tax revenue has significantly positive impacts on economic growth. On the other hand, the effect on growth of economy of the ten institutional quality indices is diverse. The data also indicated convergence in all estimation models as suggested by classical theories of economic growth.

scholarly journals What Factors Affect Income Inequality and Economic Growth in Middle-Income Countries?

2019 ◽  
Vol 12 (1) ◽  
pp. 40 ◽  
Author(s):  
Duc Vo ◽  
Thang Nguyen ◽  
Ngoc Tran ◽  
Anh Vo
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Method Of Moments ◽  
Generalized Method Of Moments ◽  
Granger Causality Test ◽  
Causality Test ◽  
Middle Income ◽  
Full Sample ◽  
Middle Income Countries ◽  
Research Period

Income inequality in many middle-income countries has increased at an alarming level. While the time series relationship between income inequality and economic growth has been extensively investigated, the causal and dynamic link between them, particularly for the middle-income countries, has been largely ignored in the current literature. This study was conducted to fill in this gap on two different samples for the period from 1960 to 2014: (i) a full sample of 158 countries; and (ii) a sample of 86 middle-income countries. The Granger causality test and a system generalized method of moments (GMM) are utilized in this study. The findings from this study indicate that causality is found from economic growth to income inequality and vice versa in both samples of countries. In addition, this study also finds that income inequality contributes negatively to the economic growth in the middle-income countries in the research period.

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.

The impact of urbanization on energy consumption and efficiency

2017 ◽  
Vol 28 (7) ◽  
pp. 673-686 ◽  
Author(s):  
Pengfei Sheng ◽  
Yaping He ◽  
Xiaohui Guo
Keyword(s):  
Energy Consumption ◽  
Method Of Moments ◽  
Energy Use ◽  
Generalized Method Of Moments ◽  
Method Of Moments Estimation ◽  
Process Of Urbanization ◽  
Per Capita ◽  
Using Data ◽  
Impact Of Urbanization ◽  
The Impact

There is no consensus about the impact of urbanization on energy efficiency. We seek to fill this gap in literature using data from 78 countries for the period of 1995 through 2012. Extending the Stochastic Impacts by Regression on Population, Affluence, and Technology model, we identify the impact of urbanization on energy consumption and efficiency. Results of generalized method of moments estimation indicate that the process of urbanization leads to substantial increases in both the actual and the optimal energy consumption, but a decrease in efficiency of energy use. In addition, we find that the extent to which energy inefficiency correlates with urbanization is greater in countries with higher gross domestic product per capita.

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