scholarly journals Domestic Credit and the Balance of Payment Deficit: Evidence from a Heterogeneous Panel of Five Selected Mena Countries

2021 ◽  
Vol 35 (1) ◽  
pp. 133-148
Author(s):  
Azeddine Ghilous ◽  
Adel Ziat
Keyword(s):  
Negative Impact ◽  
Panel Data Analysis ◽  
Policy Instruments ◽  
Cross Sectional ◽  
Net Foreign Assets ◽  
Mena Countries ◽  
Long Run ◽  
Domestic Credit ◽  
Common Correlated Effects ◽  
Foreign Assets

Abstract This study investigated the relationship between domestic credit and net foreign assets in the long run through the monetary approach to the balance of payments (MABP) for a panel of five selected MENA countries (Jordan, Egypt, Algeria, Morocco, Tunisia) during the period extending from 1980 to 2019. It employed the second-generation methods in panel data analysis to deal with cross-sectional dependence (CSD) and slope heterogeneity. According to the panel results for Common Correlated Effects Mean Group (CCEMG) and Augmented Mean Group (AMG) estimators, domestic credit has a significant negative impact on net foreign assets in the long run. The country-specific results for the AMG estimator strongly supported the MABP propositions in Jordan, Morocco, and to a lesser extent, in Egypt and Algeria. As for Tunisia, the results do not conform with what MABP predicted. The implicit conclusion is that an increase in domestic credit causes a continuous loss of net foreign assets in Egypt, Jordan, Morocco, and Algeria. Thus, monetary authorities should formulate an appropriate monetary policy to control the domestic credit creation as a mechanism toward improving the balance of payment (BOP) position. Furthermore, the policymakers should concentrate on other policy instruments to correct the BOP deficit rather than focusing on monetary tools, especially in Tunisia, where the findings showed that BOP was not a monetary phenomenon.

scholarly journals The trade-off between GDP and CO2 emissions in poor countries: A dynamic common correlated effects approach for unbalanced panel data

2021 ◽  
Author(s):  
Quoc Khanh Duong
Keyword(s):  
Climate Change ◽  
Panel Data ◽  
Co2 Emissions ◽  
Growth Models ◽  
Cross Sectional ◽  
Poor Countries ◽  
Trade Offs ◽  
Long Run ◽  
Common Correlated Effects ◽  
Unbalanced Panel Data

Abstract In recent years, the term "climate change" has been increasingly receiving a lot of attention from scholars and policy makers, adversely affecting the lives of people (mostly of the poor) around the world in the present, and threatening the environment quality in the future. With many concerns about environmental degradation, countries tend to transform economic growth models causing negative impacts on the environment, especially for those in the stage of industrialization and modernization. This study was aimed at investigating the trade-offs between economic development and climate change among poor nations – the most affected by and most likely causing to climate change. By using a dynamic common correlated effects approach for unbalanced panel data which deals with cross-sectional dependency and time-series persistence, the paper showed that GDP is strongly correlated to CO2 emissions both in the short and long run, and one of the reasons is the use of CO2-generating energy sources.JEL classification: C23, O44, Q54

scholarly journals Nexus Between Carbon Emissions, Energy Consumption, Urbanization and Economic Growth in Asia: Evidence From Common Correlated Effects Mean Group Estimator (CCEMG)

2021 ◽  
Vol 8 ◽  
Author(s):  
Yusuf Babatunde Adeneye ◽  
Amar Hisham Jaaffar ◽  
Chai Aun Ooi ◽  
Say Keat Ooi
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Carbon Emission ◽  
Panel Cointegration ◽  
Energy Prices ◽  
Asian Countries ◽  
Cross Sectional ◽  
Long Run ◽  
Cointegration Tests ◽  
Common Correlated Effects

This study investigates the dynamic relationships between carbon emission, urbanization, energy consumption, and economic growth in a panel of 42 Asian countries for the period 2000–2014 using dynamic common correlated effects panel data modeling. This study employs second generation cross-sectional Pesaran (J. Appl. Econom., 2007, 22(2), 265-312) panel unit root, Westerlund panel cointegration tests (Econom. Stat., 2007, 69(6), 709-748), and Pesaran’s (Econometrica, 2006, 74(4), 967-1012) common correlated effects mean group estimation technique. These approaches allow for cross-sectional dependence, and are robust to the presence of common factors, serial correlation, and slope heterogeneity. The Common Correlated Effect Mean Group test reveals a high average coefficient of 0.602 between carbon emission and energy consumption while low coefficients of 0.114 and 0.184 for the pairs of carbon emission-urbanization and carbon emission-GDP, respectively for the panel as a whole, suggesting a cointegration between carbon emission, urbanization, energy consumption, and economic growth. The results indicate that there is relatively high carbon emission especially for highly populated and geopolitical risk Asian countries in the short run. Findings reveal long run relationships between the variables, which is attributed to the on-going carbon taxation and energy prices. Our results are robust to PMG-ARDL estimator. Overall, these findings cast important implications on renewable energy policy and urban planning insights for the policymakers.

Exploring the Nexus among Environmental Pollution, Economic Growth Energy Use and Foreign Direct Investment in Sub Sahara Africa

2019 ◽  
Vol 8 (1) ◽  
pp. 54
Author(s):  
Max William Ssali ◽  
Jianguo Du ◽  
Isaac Adjei Mensah ◽  
Duncan O. Hongo
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Energy Use ◽  
Negative Impact ◽  
Test Panel ◽  
Cross Sectional ◽  
Long Run ◽  
Short Run ◽  
Growth Energy

This research seeks to enhance the current literature by exploring the nexus among environmental contamination, economic growth, energy use and foreign direct investment in 6 Selected Sub-Saharan-African-nations for a time of 34 years (1980-2014). By applying, panel unit root (CADF and CIPS, Cross-sectional independence test), panel cointegration (Pedroni and Kao cointegration test, Panel PP, Panel ADF), Hausman poolability test and an auto-regressive distributed lag procedure in view of the pooled mean group estimation (ARDL/PMG), experimental findings discloses that alluding to the related probability values, the null hypothesis of cross-sectional independence for all variables is rejected because they are not stationary at levels but rather stationary at their first difference. The variables are altogether integrated at the same order I(1). Findings revealed that there is a confirmation of a bi-directional causality between energy use and CO2 in the short-run as well as one-way causality running from energy use to CO2 in the long run. There is additionally a significant positive outcome and uni-directional causality from CO2 to foreign direct investment in the long-run yet no causal relationship in the short-run. An increase in energy use by 1% causes an increase in CO2 by 49%. An increase in economic growth by 1% causes an increment in CO2 by 16% and an increase in economic growth squared by 1% diminish CO2 by 46%. The positive and negative impact of economic growth and its square approve the EKC theory. To guarantee sustainable economic development Goal, more strict laws like sequestration ought to be worked out, use of sustainable power source ought to be stressed. GDP ought to be multiplied to diminish CO2 by the utilization of eco-technology for instance carbon capturing, to save lives and also to maintain a green environment.

scholarly journals Wagner versus Keynes: Empirical evidence from Turkey’s provinces

2020 ◽  
Vol 67 (5) ◽  
pp. 657-674 ◽  
Author(s):  
Ersin Sagdic ◽  
Mahmut Sasmaz ◽  
Guner Tuncer
Keyword(s):  
Panel Data Analysis ◽  
Strong Support ◽  
Panel Cointegration ◽  
Group Method ◽  
Cross Sectional ◽  
Bootstrap Test ◽  
Long Run ◽  
Augmented Dickey Fuller ◽  
Cross Sectional Dependence ◽  
Relationship Of

Wagner?s law and Keynes? hypothesis has long been debated in economics. In this paper, we test the income-expenditure hypothesis for eighty-one of Turkey?s provinces for the period 1992 to 2013 using panel data analysis. For this purpose, the validity of these hypotheses is tested by applying recent panel cointegration and causality techniques, allowing for cross-sectional dependence and heterogeneity between regions. Under the presence of cross-sectional dependence and heterogeneity, the level of integration of the variables was tested by means of the cross-sectionally augmented Dickey-Fuller test, the presence of long-run relationship of the variables was tested with the Westerlund-Edgerton Lagrange multiplier bootstrap test, long-run cointegration coefficients were estimated with the Eberhardt-Bond panel augmented mean group method, and finally causality relationship was defined by the Dumitrescu-Hurlin test. The results of this study provide strong support for the validity of Wagner?s law and Keynes? hypothesis for Turkey.

scholarly journals How Do Population and Urbanization Cause Environmental Degradation in South Asian Countries? A Panel Data Analysis

2020 ◽  
Vol 6 (4) ◽  
pp. 799-809
Author(s):  
Noreen Safdar ◽  
Shezza Ashraf ◽  
Fatima Farooq ◽  
Junaid Qadir
Keyword(s):  
Economic Growth ◽  
South Asian ◽  
Environmental Degradation ◽  
Negative Impact ◽  
Panel Data Analysis ◽  
Negative Influence ◽  
Causality Analysis ◽  
Asian Countries ◽  
Cross Sectional ◽  
Population Urbanization

The following study shows the economic consequences of population and environmental degradation in selected South Asian Countries for the time period 2000- 2018. Panel cointegration shows the long-run association among population, urbanization, environment and economic growth. By using PMG estimation technique, the results show that environmental degradation has a negative influence on economic growth while the urban population has a progressive impact on economic growth while the total population has a negative impact on economic growth. The results of causality analysis show that there is bidirectional causality among all variables which indicates that population, urbanization, environment and economic growth are causing each other. It is also noticed by the causality analysis that population, urbanization and economic growth are causing environmental degradation in south Asian countries. Further the results show that there is cross-sectional dependency among all variables in selected countries which reveals that all these countries should make collaborative strategies to increase economic growth and to cope up the problem of environmental degradation.

scholarly journals Test of Monetary Approach to Balance of Payments in West Africa Monetary Zone

2020 ◽  
Vol 4 (1) ◽  
pp. 9-17
Author(s):  
Foluso Ololade Oluwole ◽  
John Adebayo Oloyede
Keyword(s):  
Exchange Rate ◽  
West Africa ◽  
Positive Relationship ◽  
Positive Impact ◽  
Negative Relationship ◽  
Rate System ◽  
Net Foreign Assets ◽  
Monetary Approach ◽  
Domestic Credit ◽  
Foreign Assets

This research tested the monetary approach to Balance of Payment in developing countries of West Africa in order to affirm whether the specified relationship in the approach depicts correctly the actual behaviour of the economies. Time series and cross-sectional data that ranges from 1970 – 2016 were used. The empirical results of the fixed effect model established a significant positive relationship between net domestic credit, interest rate and exports; an insignificant positive relationship between capital movements, imports, income and the dependent variable. Exchange rate, however, had a significant negative relationship with the net foreign assets, while inflation had an insignificant but negative relationship with net foreign assets. The pairwise causality tests indicated a unidirectional relationship between exchange rate, net domestic credit and net foreign assets while the other variables move independently and cannot granger cause net foreign assets. Hence, the study concludes that the Polak model is valid in the West Africa Monetary Zone despite the fact that they are no more operating a fixed exchange rate system. The study suggests that the attention of the monetary authorities and the governments should not only be on decreasing the money supply in the economy, since an increase in net domestic credits has a positive impact on the net foreign assets provided it is channeled towards domestic production.

scholarly journals A Quantitative Assessment of the Role of the Private Sector in Economic Diversification in UAE

2019 ◽  
Vol 11 (4) ◽  
pp. 23
Author(s):  
Radwa Radwan Said
Keyword(s):  
Private Sector ◽  
United Arab Emirates ◽  
Negative Impact ◽  
Positive Impact ◽  
Trade Openness ◽  
Economic Diversification ◽  
Long Run ◽  
Domestic Credit ◽  
Short Run ◽  
The Government

The United Arab Emirates (UAE) has often been addressed as a success case in the GCC region due to its implemented policies that spurred growth and development with a market-friendly approach. This study aims to investigate the relationship between economic diversification and private sector development. For this, we employed an ARDL con-integration method to check the long run as well as short run relationship between variables. We found that the domestic credit to private sector has a positive relationship with diversification index. Also, domestic credit to private sector (DCPS) percentage of GDP has both short and long run relationship with economic diversification index. The results indicate that the domestic credit to private sector will promote the economic diversification in both the short and long runs. Moreover, the government infrastructure will also promote economic diversification in the long run but not in the short run. The trade openness has a negative impact on economic diversification in the long run, but it has a positive impact in the short run.

Factors hindering economic development: evidence from the MENA countries

2019 ◽  
Vol 14 (2) ◽  
pp. 281-299 ◽  
Author(s):  
Ali Awdeh ◽  
Hassan Hamadi
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Negative Impact ◽  
Political Instability ◽  
Participation Rate ◽  
Military Spending ◽  
Mena Region ◽  
Content Type ◽  
Mena Countries ◽  
Long Run

Purpose Despite the possession of considerable natural, financial and human resources, the Middle East and North Africa (MENA) region suffers low economic growth rates, high unemployment rates, high poverty rates and high illiteracy rates. The purpose of this paper is to find out the factors that hinder the development of economic activities in this region. Design/methodology/approach This study uses co-integration analysis and vector error correction model on a sample of 18 MENA countries, covering the period 2002–2016. It exploits gross domestic product (GDP) as a dependent variable, and public debt, trade balance, natural resources rents, importation of high technology, labour participation rate, military spending, population size, political instability and corruption as independent variables. Findings The paper finds that public borrowing, trade deficit, military expenditures, the low level of technological innovation, population, political turbulences and corruption, all hinder GDP in the long-run. Additionally, public debt, military spending and political instability obstruct GDP in the short run. The results also suggest the existence of Dutch diseases in both the short- and the long-run. On the other hand, labour market conditions do not seem to have any effect on the economic performance of the MENA countries. Originality/value In addition of examining an understudied sample of countries, this paper – unlike other studies on the MENA region that look at factors that boost economic growth – exploits factors that have possible negative impact on the economic situation of the region.

scholarly journals Fiscal Policy Tools and Economic Growth in Jordan: Evidence from Time-Series Models

2018 ◽  
Vol 11 (1) ◽  
pp. 1
Author(s):  
Mohamed Ibrahim Mugableh
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Developing Economies ◽  
Negative Impact ◽  
Positive Impact ◽  
Policy Instruments ◽  
Government Expenditures ◽  
Policy Tools ◽  
Long Run ◽  
General Government

This paper examines equilibrium relationships and dynamic causality analyses between economic growth and fiscal policy tools in Jordan for the (1978-2017) period. It employs autoregressive distributed lag and vector error correction models. The results suggest that there is evidence of a co-integration and causal relationships between economic growth and fiscal policy instruments. General government expenditures have long-run positive impact on economic growth, implying that general government expenditures improve economic growth. Moreover, total tax rates have long-run negative impact on economic growth, implying that a tax cut stimulates economic growth. These results are broadly consistent with similar studies carried out for other developing economies. 

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