scholarly journals Post-Crisis Household Savings Behavior in Romania

2019 ◽  
Vol 1 (1) ◽  
pp. 17-33
Author(s):  
Dan-Gabriel Anghel ◽  
Adina-Ionela Străchinaru
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Linear Growth ◽  
Household Savings ◽  
Growth Trend ◽  
Savings Behavior ◽  
Monthly Data ◽  
Vector Error Correction ◽  
Vector Error ◽  
Vector Error Correction Models

Abstract The recent linear growth trend recorded by net savings in Romania is very intriguing. We thus study household savings behavior using Vector Autoregression and Vector Error Correction models on a sample of post-2007 monthly data. Contrary to common economic theory, we find that real interest rates do not influence the loan and savings behavior of Romanian households in our sample, despite their significant volatility and, even, negative recorded values. The results indicate a change in attitude and in risk perception of Romanian households in the aftermath of the financial crisis in 2008, in the way that has significantly decreased their preference for present consumption in favor of savings. Despite the significant increase in net savings, we also find that they have not significantly contributed to economic growth.

scholarly journals Relationship between sectoral exports and economic growth - A vector error correction modeling for Vietnamese fishery sector 1997 – 2008

2020 ◽  
Vol 1 (1) ◽  
Author(s):  
Nguyen Minh Duc ◽  
Nguyen Anh Tram
Keyword(s):  
Economic Growth ◽  
Error Correction ◽  
Reverse Direction ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
The One ◽  
Vector Error Correction Models ◽  
Error Correction Modeling ◽  
Econometric Approach

Numerous literatures have documented the relationship between exports and economic growth of a nation but not so many on the one between exports of an economic sector and national growth. This paper examines the latter relationship with evidence from fishery exports of Vietnam during 1997 to 2008. The contribution of fishery sector in Vietnamese Gross Domestic Products (GDP) may be mathematically calculated with statistical figures. However, the effects of fishery exports on the economic growth are yet to be thoroughly studied in an econometric approach. An econometric approach with stationary and co-integration tests and vector error correction models used in this study allows forecasting a persistence of the effects of fishery exports on Vietnamese GDP despite of different seasonal business. For the long run estimation, a double increase in national fishery exports revenue would raise the GDP by 7%. This has a great economic meaning in developing process of Vietnamese economy. In reverse direction, Vietnamese fishery exports would increase by 5.2% with a 10% increase in its GDP. Confirming the role of fishery exports in national economic growth, it is necessary for the sector to improve its competitive capacity.

scholarly journals An Assessment of House Loans Cointegration with Macro Variables in Selected Euro Zone Countries

Ekonomika ◽  
2020 ◽  
Vol 99 (2) ◽  
pp. 39-58
Author(s):  
Kazys Kupčinskas ◽  
Arvydas Paškevičius
Keyword(s):  
Interest Rates ◽  
Correction Model ◽  
Monthly Data ◽  
Vector Error Correction ◽  
Vector Error ◽  
Time Period ◽  
Long Time ◽  
Macro Variables ◽  
The Relationship

This paper performs an empirical study on house loans, interest rates, unemployment, and house rent prices relationship in Germany, France, Spain and Italy from the year 2003 to 2018. We look for the cointegration and causality relationship between the house loans and macro variables with the help of the Vector error correction model (VECM) and Granger causality methods. We investigate whether variables with monthly data explain better the relationship and causal effects between the variables. We find a long term cointegrating relationship between the real house loans and interest rates, unemployment and house rent prices for France, Spain, and Italy, but not for Germany. On average the equilibrium in house loan development is reached from 4 to 8 years, meaning that long term equilibrium exists, but the variables reach it in a rather long time period. The ECB deposit facility rate included as an exogenous variable in four countries gained no significant power in explaining the short term changes of house loans in any of the country. We reveal a complex interaction between the bank’s credits and unemployment, interest rates, house rental prices in the paper. 

scholarly journals DETERMINANT ANALYSIS OF FINANCIAL SECTOR STOCK IN INDONESIA STOCKS EXCHANGE

2020 ◽  
Vol 1 (5) ◽  
pp. 850-864
Author(s):  
Liza Yusmia ◽  
Abitur Asianto
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Stock Exchange ◽  
Oil Prices ◽  
Financial Sector ◽  
Stock Index ◽  
Monthly Data ◽  
Vector Error Correction ◽  
Vector Error

These research had purposed to examine related to macroeconomic variables on financial sector stock index in Indonesia Stock Exchange. This research used Vector Error Correction Model (VECM) method with monthly data from financial sector stock index as the dependent variable and the GDP quarterly data, as well as monthly data on inflation, BI interest rates, exchange rates, the Fed interest rate, gold prices, oil prices,and also the S&P 500 index as independent variable with data range from January 2014 to August 2019. These results that obtained from this research were the shocks in BI interest rate variable and the exchange rate which have positive responses in the long term, while the GDP, inflation, and Fed interest rates , gold prices, oil prices, and the S&P 500 index responded negatively in the long term by the financial sector stock index. Beside that, the BI interest rate variable has the greatest contribution in changed of financials stock index.

Economic Growth and Democracy in Africa: Revisiting the Feldstein-Horioka Puzzle

2006 ◽  
Vol 39 (4) ◽  
pp. 855-881 ◽  
Author(s):  
Emizet F. Kisangani
Keyword(s):  
Economic Growth ◽  
Economic Performance ◽  
Generalized Method Of Moments ◽  
Policy Implications ◽  
African Countries ◽  
Vector Error Correction ◽  
Vector Error ◽  
Politique Économique ◽  
Close Relationship ◽  
Vector Error Correction Models

Abstract.The debate on the relationship between economic performance (sustained economic growth, saving and investment) and democracy remains unsettled. This article provides a critical review of the arguments by relying on the Feldstein-Horioka puzzle. A generalized method of moments (GMM) using 37 African countries from 1960 to 1998 reveals a close relationship among indicators of economic performance but no relationship between economic performance and democracy. Co-integration and vector error correction models contradict GMM results, however. Democracy fosters investment in eight countries, enhances saving in three other countries and sustains economic growth in five. Therefore, single country analyses using appropriate methodologies seem warranted to avoid putting forth ecological fallacies with detrimental policy implications.Résumé.Le débat sur la relation entre performance économique (croissance économique soutenue, épargne et investissement) et démocratie est encore loin d'être clos. Cet article fait une analyse critique des thèses en présence en se basant sur le paradoxe de Feldtsein-Horioka. L'analyse de 37 pays africains de 1960 à 1998 utilisant la méthode des moments généralisée (MMG) démontre un lien étroit entre les divers indicateurs de performance économique, mais aucun lien entre ceux-ci et la démocratie. Cependant, la cointégration et les modèles vectoriels à correction d'erreurs contredisent les résultats basés sur la MMG. En effet, la démocratie favorise l'investissement dans huit pays, encourage l'épargne dans trois autres pays, et soutient la croissance économique dans cinq pays. Il semble justifié, par conséquent, de recourir à des analyses individuelles par pays utilisant des méthodologies appropriées pour éviter des erreurs écologiques aux répercussions néfastes sur la politique économique.

scholarly journals Crowding-out Hypothesis in a Vector Error Correction Framework: A Case Study of Pakistan

2001 ◽  
Vol 40 (4II) ◽  
pp. 633-650 ◽  
Author(s):  
Kalim Hyder
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Budget Deficit ◽  
Public Investment ◽  
Private Investment ◽  
Vector Error Correction ◽  
The Public ◽  
Vector Error ◽  
Development Expenditure ◽  
Negative Effect

Under the umbrella of the IMF stabilisation programmes, Pakistan has pursued a policy of fiscal consolidation since 1988. A look at the budget deficit from 1988 onwards reveals that the policy has only been marginally successful. Even this fragile accomplishment of the Fund-based programme has been achieved at a much greater cost: the reduction in budget deficit has only been materialised because of the curtailment of development expenditure component of total fiscal outlays [Social Policy and Development Centre (2001)]. Economic theory suggests that development expenditure component of fiscal outlays, which also equals net investment by the public sector,1 has a significant relationship with both the rate of private investment and economic growth. If public investment increases, fewer funds will be available for private investment. Competition will thereby drive the interest rates up leading to lower level of private investment. Neo-classicals believe that this process will only result in a redistribution of gross national between the public and the private sector and the rate of economic growth will remain intact. On the other hand, Keynesians argue that the multiplier effect of higher public spending will be larger as compared to the induced negative effect of reduced private investment on the rate of economic activity and, therefore, gross national product will increase.

Economic Turmoil in Islamic Banking Investment

ETIKONOMI ◽  
2020 ◽  
Vol 19 (2) ◽  
Author(s):  
Budiandru Budiandru ◽  
Sari Yuniarti
Keyword(s):  
Interest Rates ◽  
Stock Price ◽  
Time Series Data ◽  
Series Data ◽  
Islamic Banking ◽  
Vector Error Correction ◽  
Investment Financing ◽  
Vector Error ◽  
Operational Activities

Investment financing is one of the operational activities of Islamic banking to encourage the real sector. This study aims to analyze the effect of economic turmoil on investment financing, analyze the response to investment financing, and analyze each variable's contribution in explaining the diversity of investment financing. This study uses monthly time series data from 2009 to 2020 using the Vector Error Correction Model (VECM) analysis. The results show that the exchange rate, inflation, and interest rates significantly affect Islamic banking investment financing in the long term. The response to investment financing is the fastest to achieve stability when it responds to shocks to the composite stock price index. Inflation is the most significant contribution in explaining diversity in investment financing. Islamic banking should increase the proportion of funding for investment. Customers can have a larger business scale to encourage economic growth, with investment financing increasing.JEL Classification: E22, G11, G24How to Cite:Budiandru., & Yuniarti, S. (2020). Economic Turmoil in Islamic Banking Investment. Etikonomi: Jurnal Ekonomi, 19(2), xx – xx. https://doi.org/10.15408/etk.v19i2.17206.

Enhancing Economic Growth and Government Revenue Generation in Nigeria: The Role of Diaspora Remittances

2021 ◽  
pp. 003464462110256
Author(s):  
Dal Didia ◽  
Suleiman Tahir
Keyword(s):  
Economic Growth ◽  
Parameter Estimates ◽  
Gross Domestic Product Growth ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Short Run ◽  
The Empirical Analysis

Even though remittances constitute the second-largest source of foreign exchange for Nigeria, with a $24 billion inflow in 2018, its impact on economic growth remains unclear. This study, therefore, examined the short-run and long-run impact of remittances on the economic growth of Nigeria using the vector error correction model. Utilizing World Bank data covering 1990–2018, the empirical analysis revealed that remittances hurt economic growth in the short run while having no impact on economic growth in the long run. Our parameter estimates indicate that a 1% increase in remittances would result in a 0.9% decrease in the gross domestic product growth rate in the short run. One policy implication of this study is that Nigeria needs to devise policies and interventions that minimize the emigration of skilled professionals rather than depending on remittances that do not offset the losses to the economy due to brain drain.

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