scholarly journals Fiscal and monetary policy effectiveness in Turkey: A comparative analysis

2020 ◽  
pp. 19-19
Author(s):  
Philip Arestis ◽  
Hüseyin Şen ◽  
Ayşe Kaya
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Output Growth ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Fiscal Space ◽  
Monetary Policy Effectiveness ◽  
The Impact ◽  
Fiscal And Monetary Policy

Relying on the Autoregressive Distributed Lag cointegration technique, this paper assesses the comparative effectiveness of the fiscal and monetary policy on output growth in Turkey over the period 2003:q1-2019:q1. The empirical findings show that both policies are effective in promoting output growth but with varying degrees, suggesting that the impact of monetary policy on output growth is more significant than that of fiscal policy. Overall, based on the findings, we can suggest that the Turkish authorities should set sight on monetary policy to achieve higher output growth while seeking ways to improve the growth-enhancing role of fiscal policy. To that end, among many others, budgetary flexibility can be increased through creating fiscal space, and growth-friendly tax and spending reforms can be undertaken without undermining growth-equity trade-off while giving priority to proper coordination of fiscal policy with monetary policy.

scholarly journals Effects of foreign direct investment on economic growth in Ghana: the role of institutions

2021 ◽  
Vol 20 (1) ◽  
pp. 23-34
Author(s):  
Evans Kulu ◽  
Samuel Mensah ◽  
Prince Mike Sena
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Secondary Data ◽  
Output Growth ◽  
Data Series ◽  
Development Indicators ◽  
Distributed Lag ◽  
The Impact

The role of institutions in both the inflow and the impact of foreign direct investment is of great im¬portance. The quality of institutions in a country can direct investment towards improving growth. This paper analyzes the individual and combined effect of foreign direct investment and institutions on economic growth in Ghana. The paper used the Auto Regressive Distributed Lag (ARDL) tech¬nique for secondary data obtained from 1995 to 2019. All data series, except for the quality institution index, were drawn from the World Bank Development Indicators. Institutional Quality Index data was obtained from the Heritage Foundation’s Economic Freedom Index website. The results of the ARDL model indicate that foreign direct investment and a quality institutional index together have a significantly positive effect on a country’s economic growth compared to their individual effects in both the short and long run. The study recommends that government policies should be aimed at attracting foreign direct investment while strengthening institutions and regulations to enhance output growth.

scholarly journals Output Volatility and Government Size in Nigeria

2020 ◽  
Vol 20 (1) ◽  
pp. 286-301
Author(s):  
Philip I. Nwosa ◽  
Chris Ehinomen ◽  
Ephraim Ugwu
Keyword(s):  
Fiscal Policy ◽  
Government Size ◽  
Output Volatility ◽  
Large Share ◽  
Role Of Government ◽  
Automatic Stabilization ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
The Relationship

AbstractResearch background: Output volatility has potentially adverse consequences on the economy and the stabilizing role of fiscal policy is linked to the share of government size in an economy. Hence, given the relative large share of government in developing countries, government size is expected to play an important role in stabilizing output volatility.Purpose: This study examines the relationship between output volatility and government size in Nigeria. The study seeks to establish if government size mitigates output volatility in Nigeria.Research methodology: The study employs the Autoregressive Distributed Lag (ARDL) technique after conducting stationarity and co-integration tests.Results: The results of the ARDL estimate showed that government size lessens output volatility but the magnitude was insignificant. Further, the study found that volatility in aggregate government spending; international oil price and public debt were significant determinants of output volatility in Nigeria.Novelty: This showed that the automatic stabilization role of government size on output volatility could not be established. The automatic stabilization role of fiscal policy can be improved by increasing social security transfers (pension payment), payments of unemployment benefits and increasing civil servants minimum wage.

Modeling the impact of banking sector credit on growth performance: An empirical evidence of credit to household and enterprise in Pakistan

2019 ◽  
Vol 06 (02) ◽  
pp. 1950012
Author(s):  
Sadaf Majeed ◽  
Syed Faizan Iftikhar ◽  
Zeeshan Atiq
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Enterprise Credit ◽  
Private Credit ◽  
Household Credit ◽  
Sustainable Economic Growth ◽  
The Impact

This paper attempts to distinguish the role of banking sector credit to enterprise and household in economic growth of Pakistan for the period from 1982 to 2017. Using Autoregressive Distributed Lag (ARDL) bound technique to cointegration, our results confirm that enterprise credit has a positive and significant impact on the economic growth of Pakistan for the sample period. In contrast, the other component of private credit, i.e., household credit is not a positive driver of economic growth. CUSUM test finds that the parameters of the model with enterprise and household credit are stable. It is recommended therefore that the central bank should modify the credit policy for household sector and support enterprise credit in the context to achieve sustainable economic growth in Pakistan.

scholarly journals Fiscal policy is still an effective instrument of macroeconomic policy

2011 ◽  
Vol 58 (2) ◽  
pp. 143-156 ◽  
Author(s):  
Philip Arestis
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Macroeconomic Policy ◽  
Policy Coordination ◽  
Careful Consideration ◽  
Recent Developments ◽  
Monetary Policy Coordination ◽  
Effective Instrument ◽  
Fiscal And Monetary Policy

Recent developments in macroeconomics and macroeconomic policy, what has come to be known as ?New Consensus in Macroeconomics?, downgrades the role of fiscal policy and upgrades that of monetary policy. This contribution aims to consider this particular contention by focusing on fiscal policy. We consider fiscal policy within the current ?new consensus? theoretical framework, which views fiscal policy as ineffective, and argue that it deserves a great deal more attention paid to it than it has been recently. We review and appraise recent and not so recent theoretical and empirical developments on the fiscal policy front. The possibility of fiscal and monetary policy coordination is proposed and discussed to conclude that it deserves a great deal more attention and careful consideration than it has been given to in the past. Our overall conclusion is that discretionary application of fiscal and monetary policy in a coordinated and focused manner as a tool of macroeconomic policy deserves serious attention paid to it than hitherto.

scholarly journals The role of the globalisation process on mitigation of carbon dioxide emissions of Latin American & Caribbean countries

2021 ◽  
Vol 16 (45) ◽  
Author(s):  
Matheus Koengkan ◽  
José Alberto Fuinhas
Keyword(s):  
Carbon Dioxide ◽  
Panel Data ◽  
Latin American ◽  
Environmental Degradation ◽  
Carbon Dioxide Emissions ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
The Impact

The impact of globalisation on carbon dioxide emissions was analysed in a panel data of thirteen LAC countries for the period from 1991 to 2012. A panel autoregressive distributed lag methodology was used to decompose the total effects of globalisation on carbon dioxide emissions both in short- and long-run components. There is evidence that globalisation contributes to reducing carbon dioxide emissions in the long-run. A possible explanation of this result is that the process of globalisation causes technological enhancement in LAC countries, which contributes to a decrease in environmental degradation. Globalisation has other implications, such as the transfer of responsibility from the state to the private sector, where this transfer corresponds to the shifting of regulatory attributes to independent governmental regulatory authorities, in other words, “regulation for competition”.

scholarly journals Whether Fiscal Stance or Monetary Policy is Effective for Economic Growth in Case of South Asian Countries?

2008 ◽  
Vol 47 (4II) ◽  
pp. 791-799 ◽  
Author(s):  
Shahid Ali ◽  
Somia Irum ◽  
Asghar Ali
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Fiscal Policy ◽  
Asian Countries ◽  
Policy Mix ◽  
Monetary Policies ◽  
Tax Rate ◽  
The Government ◽  
The Impact ◽  
Fiscal And Monetary Policy

Monetary policy and fiscal policy are sister strategies that can be used alone and in combination to direct the economic goals. In the literature relative efficacy of fiscal and monetary policy has been studied extensively. Friedman and Meiselman (1963), Ansari (1996), Reynolds (2000, 2001), Chari, et al. (1991, 1998), Schmitt and Uribe (2001a), Shapiro and Watson (1988), Blanchard and Perroti (1996), Christiano, et al. (1996), Chari and Kehoe (1998), Kim (1997), Chowdhury (1986, 1988), Chowdhury, et al. (1986), Weeks (1999), Feldstein (2002) and Cardia (1991) have examined the impact of fiscal and monetary policies on various economic aggregates. However, the bulk of theoretical and empirical research has not reached on conclusion concerning the relative power of fiscal and monetary policy to effect economic growth. Some researchers find support for the monetarist view, which suggests that monetary policy generally has a greater impact on economic growth and dominates fiscal policy in terms of its impact on investment and growth. [Friedman and Meiselman (1963); Ajaye (1974); Elliot (1975); Batten and Hafer (1983)], while other argued that fiscal stimulates are crucial for economic growth. [Chowdhury (1986); Olaloye and Ikhide (1995)], On the other hand, according to Cardia (1991) macroeconomic activities are largely explained by some other variables. The experiment of 1970s clearly demonstrates that a policy mix produced only stagflation. Some economist took keen interest in money by combining Keynesian neoclassical mixture which is called the “funnel” theory by James Tobin. The argument was that tax rate and money growth simultaneously leads to stagflation thus the Government could choose either fiscal or monetary policy stimulus which will enhance growth. [Reynolds (2001)].

scholarly journals Coordination and Crisis in Monetary Unions*

2015 ◽  
Vol 130 (4) ◽  
pp. 1727-1779 ◽  
Author(s):  
Mark Aguiar ◽  
Manuel Amador ◽  
Emmanuel Farhi ◽  
Gita Gopinath
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Monetary Union ◽  
Sovereign Debt ◽  
Member Country ◽  
Conventional Wisdom ◽  
Limited Commitment ◽  
Currency Area ◽  
The Impact ◽  
Fiscal And Monetary Policy

Abstract We study fiscal and monetary policy in a monetary union with the potential for rollover crises in sovereign debt markets. Member-country fiscal authorities lack commitment to repay their debt and choose fiscal policy independently. A common monetary authority chooses inflation for the union, also without commitment. We first describe the existence of a fiscal externality that arises in the presence of limited commitment and leads countries to overborrow; this externality rationalizes the imposition of debt ceilings in a monetary union. We then investigate the impact of the composition of debt in a monetary union, that is the fraction of high-debt versus low-debt members, on the occurrence of self-fulfilling debt crises. We demonstrate that a high-debt country may be less vulnerable to crises and have higher welfare when it belongs to a union with an intermediate mix of high- and low-debt members, than one where all other members are low-debt. This contrasts with the conventional wisdom that all countries should prefer a union with low-debt members, as such a union can credibly deliver low inflation. These findings shed new light on the criteria for an optimal currency area in the presence of rollover crises.

scholarly journals The Linkage between Oil and Non-Oil GDP in Saudi Arabia

Economies ◽  
2021 ◽  
Vol 9 (4) ◽  
pp. 202
Author(s):  
Sami Alabdulwahab
Keyword(s):  
Saudi Arabia ◽  
Short Term ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Oil Revenue ◽  
Vision 2030 ◽  
Symmetric Effect ◽  
The Impact

Saudi Arabia is one of the world’s major producers of oil. The Saudi Government has launched its vision for the coming decade: Saudi Vision 2030 (also known as 2030 Vision). Saudi Vision 2030 aims to diversify economic income and be independent of oil revenue. The focus of Saudi Vision 2030 is increasing the role of the non-oil GDP in the economy. In this study, I tried to examine the link between oil and non-oil GDP in Saudi Arabia. I used autoregressive distributed lag (ARDL) cointegration, the most common tool used to examine linkages among variables. My ARDL results confirm the long-term cointegration between non-oil GDP and oil rent, thus implying that oil rent-seeking strategies still exist in Saudi Arabia. The short-term dynamics confirmed the impact of oil rent over the non-oil GDP. The ARDL results led to analyses of asymmetric effects. The NARDL model estimated and confirmed the symmetric effect of the oil rent on non-oil GDP. These results demonstrate the challenges in diversifying Saudi Arabia’s income.

scholarly journals Effects of Monetary Policy on Sectoral Output Growth in Nigeria (1986 to 2008)

2011 ◽  
Vol 2 (6) ◽  
pp. 245-254
Author(s):  
Saibu M. O
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Agricultural Sector ◽  
Manufacturing Sector ◽  
Output Growth ◽  
Economic Activities ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Sectoral Output

This study examines the effects of monetary policy on sectoral output growth in Nigeria over the period 1986:1 to 2008:4. The study utilized an Autoregressive Distributed lag (ARDL) model and the findings showed that manufacturing sector is not sensitive to any of the monetary policy variables. In sharp contrast with manufacturing sector, agricultural sector is responsive to changes in interest rate only while service and wholesale/retail economic activities are responsive to exchange rate. Furthermore, interest rate and exchange rate are the major determinants of mining output growth while building/construction sector is more responsive to changes in exchange rate and bank credit. In general exchange rate is the most important and influential monetary policy measure in Nigeria. The study concludes that monetary policy will be more effective if the inherent differences in these sectors are factor in the design of policies in Nigeria.

Fiscal and Monetary Policy under External Volatility

2006 ◽  
pp. 4-27
Author(s):  
E. Gurvich
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Central Bank ◽  
Trade Balance ◽  
Commodity Prices ◽  
Russian Economy ◽  
Policy Objectives ◽  
The Government ◽  
The Impact ◽  
Fiscal And Monetary Policy

Specific requirements on macroeconomic policy, stemming from the impact of external volatility on trade balance and fiscal revenues are studied. Income gains or losses of the Russian economy due to variation in the commodity prices are found to range from -9 to +12% of GDP over the last decade. Contribution of the government and the Central Bank to neutralizing windfall revenues is evaluated, an approach to sharing their functions is suggested. It is demonstrated that monetary policy in the post-crisis period has been aimed rather at restraining ruble appreciation, than at smoothing the effect of external volatility. Expediency to formulate fiscal policy objectives and budget rules in terms of structural deficit (adjusted for windfall revenues) is argued.

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