scholarly journals Do Natural Disasters Cause Economic Growth? An ARDL Bound Testing Approach

2018 ◽  
Vol 13 (1) ◽  
pp. 5-20 ◽  
Author(s):  
Nida Baig ◽  
Shahbaz Khan ◽  
Naeem Gul Gilal ◽  
Abdul Qayyum
Keyword(s):  
Economic Growth ◽  
Natural Disasters ◽  
Causal Relationship ◽  
Granger Causality ◽  
Risk Index ◽  
Political Stability ◽  
Development Aid ◽  
Long Run ◽  
Testing Approach ◽  
The Impact

AbstractThis article strives to work out the causal relationship between natural disasters and economic growth in Pakistan. The study empirically tests the linkage using econometric techniques autoregressive distributed lag bound model by Pesaran (2001) and Granger causality test. We develop a proxy for the loss of natural disasters by a similar method as Noy (2009) and Bergholt et.al, (2012) did. The results of ARDL bounds testing approach evidence a negative long run relationship between the proxies of natural disasters and economic growth. The results of Granger Causality depict the uni-directional causality from natural disasters to economic growth both in short-run and long-run. Overall, the study determines that natural disasters deteriorate economic growth in Pakistan. This is the first study in Pakistan to assess the causal relationship among natural disasters and economic growth. So, further empirical evidence may link natural disasters to microeconomics and financial indicators. In future, researchers might control the impact of foreign development aid, remittances, political stability and country’s corruption rating. Natural disasters are an alarming issue and, addressing the questions related to their impacts on welfare of human being and economic growth of the countries contain significant importance in order to attract the attention of global development agencies and policymakers. As per INFORM (2015) risk index, Pakistan has the highest vulnerability towards natural disasters after Afghanistan. So, the study contains more significant value in context of Pakistan.

scholarly journals Trade Openness and Economic Growth of Tanzania

2019 ◽  
pp. 1-10
Author(s):  
Salama Yusuf ◽  
Moza R. Omar
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Granger Causality ◽  
Trade Openness ◽  
Granger Causality Test ◽  
Economic Problem ◽  
Causality Test ◽  
Foreign Earnings ◽  
Long Run ◽  
The Impact

Trade openness is very crucial in the achievement of any rapid economic take off for any country. Realizing that in 1996, Tanzania government initiated economic recovery program to address the economic problem. One among them was Trade liberalization implementation. This paper examines the impact of trade openness on economic growth in Tanzania for the period 1981 to 2017.  The study utilized co-integration and Vector Error Correction Mechanism (VECM) Approach to test the relationship between trade openness and economic growth and granger causality test to examine the causal relationship between variable. The unit root tests showed that all variables were integrated after taking first difference, the Johansen co-integration result showed that the variables were co-integrated. The VECM estimate showed that there is positive long run relationship between trade openness and economic growth in Tanzania over the study period, this positive result of trade openness is possibly attributable to the fact that Tanzania unlocked its borders to international trades. In addition, granger causality test revealed that, there is no causal relationship between Trade openness and economic growth in Tanzania. Based on these findings, this study recommended that Government should encourage the production of domestic products for export purpose by developing more domestic industries and attracts more investors in the economy which will lead to increase the per capita income as well as foreign earnings that will promote economic growth of Tanzania.

scholarly journals Political Stability and its Impact on Economic Growth of Pakistan (1988-2018): A Time Series Analysis

2020 ◽  
Vol 6 (1) ◽  
pp. 273-282
Author(s):  
Majid Hussain Phul ◽  
Muhammad Saleem Rahpoto ◽  
Ghulam Muhammad Mangnejo
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Time Series Data ◽  
Political Stability ◽  
Series Data ◽  
Explanatory Variables ◽  
Long Run ◽  
Short Run ◽  
The Impact ◽  
Positive Effect

This research paper empirically investigates the outcome of Political stability on economic growth (EG) of Pakistan for the period of 1988 to 2018. Political stability (PS), gross fixed capital formation (GFCF), total labor force (TLF) and Inflation (INF) are important explanatory variables. Whereas for model selection GDPr is used as the dependent variable. To check the stationary of time series data Augmented Dickey Fuller (ADF) unit root (UR) test has been used,  and whereas to find out the long run relationship among variables, OLS method has been used. The analysis the impact of PS on EG (EG) in the short run, VAR model has been used. The outcomes show that all the variables (PS, GFCF, TLF and INF) have a significantly positive effect on the EG of Pakistan in the long run period. But the effect of PS on GDP is smaller. Further, in this research we are trying to see the short run relationship between GDP and other explanatory variables. The outcomes show that PS does not have such effect on GDP in the short run analysis. While GFCF, TLF and INF have significantly positive effect on GDP of Pakistan in the short run period.

scholarly journals Impact of Domestic Public Debt on Economic Growth - An Empirical Study in the Indian Context

2016 ◽  
Vol 6 (4) ◽  
pp. 101-116
Author(s):  
Srinivasa Rao Gangadharan ◽  
Lakshmi Padmakumari
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Positive Impact ◽  
Least Square ◽  
Distributed Lag ◽  
Long Run ◽  
Domestic Debt ◽  
Integration Test ◽  
Ordinary Least Square Regression ◽  
The Impact

This study is an empirical investigation to assess the impact of domestic debt on India’s Economic growth during the period 1980 – 2014. We use data on Domestic Debt, Net Fiscal Deficit, Exports, Savings, Real Gross Domestic Product, Population and Terms of Trade. This study adopts the ARDL Co-Integration and Granger Causality techniques to investigate the relation between the key variables. The study also employs various post estimation tests to validate the fitness and stability of the models based on Gauss Markov assumptions, after employing the ordinary least square regression on various models. We find that debt negatively impacts economic growth while savings has a positive impact. The Auto Regressive Distributed Lag (ARDL) technique used to test the robustness suggests existence of co-integration among the variables. However, none of the long run co-efficient is significant. The granger causality and co-integration test results support the traditional view that debt negatively impacts economic growth.

scholarly journals Moderating Effect of Political Instability on ICT and Economic Growth Nexus in Kenya: ARDL Bound - Co-Integration Approach

2021 ◽  
Vol 04 (10) ◽  
Author(s):  
Matundura Erickson ◽  
Keyword(s):  
Economic Growth ◽  
Political Instability ◽  
Political Stability ◽  
Moderating Effect ◽  
High Interest ◽  
Long Run ◽  
The Government ◽  
The Impact ◽  
Adf Test ◽  
The Relationship

The government has attempted to target specific macroeconomic factors in order to stimulate economic growth in Kenya through monetary and fiscal policies. Despite these efforts, Kenya's GDP growth is hampered by high interest rates and high interest rate volatility. Kenya's ability to address macroeconomic instability hinges on its ability to increase economic growth. Auxiliary evidence shows that perspectives on the relationship between ICT and economic growth are segmented. The goal of this study was to determine the impact of ICT on economic growth in Kenya, as well as the moderating effect of political instability on the relationship. The research was based on Solow's theory of growth. An explanatory research design was used, with data spanning from 1990-2020 obtained from Kenya Bureau of Statistics. In the empirical analysis, the study used the bound test to test for a long-run relationship and the Autoregressive Distributed Lag model (ARDL) to evaluate the relationship between the variables. The data was subjected to an Augmented Dickey Fuller (ADF) test to determine stationarity.The long run ARDL results indicated that the coefficients of; ICT rate were insignificant . However with the introduction of political instability as the moderator ICT was significant and positively affected economic growth. Political instability moderated the relationship between ICT ( and economic growth. As a result, promoting effective governance should help to improve political stability. The findings of this study will help the government figure out how to address the problem of low economic growth. According to the study, the government should invest in the ICT sector to improve its accessibility and affordability. Additionally, the government should work to improve political stability and good governance by gradually establishing institutions that uphold the rule of law and provide security.

scholarly journals TRADE OPENNESS AND ECONOMIC GROWTH: EMPIRICAL EVIDENCE FROM INDIA

2014 ◽  
Vol 16 (1) ◽  
pp. 188-205 ◽  
Author(s):  
Qazi Muhammad Adnan Hye ◽  
Wee-Yeap Lau
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Granger Causality ◽  
Trade Openness ◽  
Granger Causality Test ◽  
Causality Test ◽  
Long Run ◽  
Rolling Window ◽  
Short Run ◽  
The Impact

The main objective of this study is to develop first time trade openness index and use this index to examine the link between trade openness and economic growth in case of India. This study employs a new endogenous growth model for theoretical support, auto-regressive distributive lag model and rolling window regression method in order to determine long run and short run association between trade openness and economic growth. Further granger causality test is used to determine the long run and short run causal direction. The results reveal that human capital and physical capital are positively related to economic growth in the long run. On the other hand, trade openness index negatively impacts on economic growth in the long run. The new evidence is provided by the rolling window regression results i.e. the impact of trade openness index on economic growth is not stable throughout the sample. In the short run trade openness index is positively related to economic growth. The result of granger causality test confirms the validity of trade openness-led growth and human capital-led growth hypothesis in the short run and long run.

scholarly journals The Role of Renewable Energy and Ecological Footprint on Economic Growth in Francophone African Countries in presence of Institutions

2021 ◽  
Author(s):  
Ndzembanteh Aboubakary Nulambeh* ◽  
Kadir Yasin Eryiğit
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Ecological Footprint ◽  
Renewable Energy Sources ◽  
Generalized Method Of Moments ◽  
Political Stability ◽  
African Countries ◽  
Long Run ◽  
French Speaking ◽  
The Impact

Abstract This paper targets to examine the impact of renewable energy and ecological footprint on economic growth in 14 selected French-speaking countries in Africa. The study contributes to the ongoing debate in the literature on environment growth-nexus by providing evidence that economic growth emerges with environmental degradations and can be improved when there is a robust institutional framework. The present research used the generalized method of moments (GMM) to assess a dynamic growth model with data from 2007 to 2015. The results demonstrate that renewable energy is significant and negatively related to economic growth, which implies that renewable energy sources lower the per capita income growth in these countries. Meanwhile, the ecological footprint is positive and statistically significant in impacting economic growth in the long run. For institutions, we find that voice and accountability, political stability, and the rule of law are positive and statistically significant in influencing economic growth. Consequently, it is recommended that policymakers in this region develop dual policies that raise institutions' quality with minimal emissions of greenhouse gases.

scholarly journals DOES INTERNATIONAL TOURISM PROMOTE ECONOMIC GROWTH? SOME EVIDENCE FROM INDONESIA

2021 ◽  
Vol 37 (3) ◽  
pp. 775-782
Author(s):  
Martahadi MARDHANI ◽  
◽  
M. Shabri Abd. MAJID ◽  
Abd. JAMAL ◽  
Said MUHAMMAD ◽  
...  
Keyword(s):  
Economic Growth ◽  
Least Squares ◽  
Causal Relationship ◽  
Granger Causality ◽  
International Tourism ◽  
Long Run ◽  
Warm Hospitality ◽  
Tourism Sector ◽  
Growth Hypothesis

Realizing an increasing contribution of the tourism sector to global economies, this study intends to enrich the existing tourism literature by empirically exploring the short- and long-run dynamic causalities between tourism and economic growth in Indonesia over the period 1995 to 2017. For these purposes, cointegration, Fully Modified Least Squares (FMOLS), and Granger causality techniques are adopted. The study found a cointegration between tourism and economic growth, indicating the existence of a long-run relationship between the tourism sector and economic growth. In the long-run, tourism has contributed to the promotion of economic growth. Finally, both in the short- and long-run, the study found a unidirectional causal relationship running from tourism to economic growth, confirming the tourism-led growth hypothesis. To enhance Indonesia's economic growth, the tourism sector should be further promoted by making it more attractive, supported by advanced IT facilities, warm hospitality, and diversified tourism objects.

scholarly journals Examining the impact of Exports and Exchange rate on Economic Growth of Turkey

2020 ◽  
Author(s):  
Iftikhar Muhammad ◽  
Malik Shahzad Shabbir
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Granger Causality ◽  
Direct Investment ◽  
Economic Policies ◽  
Long Run ◽  
Short Run ◽  
Auto Regressive ◽  
The Impact

Abstract Purpose This study intends to analyze the long-run and short-run relationships along with the identification of causal links between exports, economic growth, and exchange rate in Turkey. Data/Design: This study uses auto-regressive distributed lags (ARDL) and Granger causality over time series monthly data from the year 2010–2018. The results indicate that exports are significantly positively related to economic growth while the exchange rate is found to be negatively related to economic growth. Findings: Moreover, findings from the test of Granger causality indicate that a unidirectional causal association is found from exports to foreign direct investment and economic growth and from economic growth to foreign direct investment. The Granger causality results indicate that an increase in exports accelerates the economic growth of Turkey and a change in growth rate and exchange rate leads to a change in foreign direct investment. Originality of work: The overall findings suggest that exports should be promoted along with the liberal-investment economic policies to boost the overall economic growth in Turkey.

scholarly journals Does Uncertainty Matter for Trade - Economic Growth Nexus in Indonesia?

2021 ◽  
Vol 67 (1) ◽  
pp. 147
Author(s):  
Panky Tri Febiyansah ◽  
Bintang Dwitya Cahyono ◽  
Rio Novandra
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Output Growth ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
The Impact ◽  
The Relationship

This paper aims to test the impact of uncertainty on the causal relationship among exports, imports, and economic growth in Indonesia. The relationship is constructed by examining the presence of FDI-adjusted exports and imports (trade) and the output link using conditional variances-covariances derived from the generalized autoregressive conditional heteroskedastic (GARCH) process in a vector error correction model (VEC-GARCH model). Using evidence in Indonesia, the model exposes the uni-directional nexus from trade performance to trade-adjusted output growth in the absence of uncertainty. The volatility effects are evident in the causal relationship between trade and output. The finding shows that the uncertainty effects hamper the trade-economic growth nexus. Incorporated with the long-run causality, trade still causes output even after containing the contributions of volatility. The significant role of imports highlights the higher demand for intermediate capital products and the inclusion of technology in strengthening economic growth.

scholarly journals Public debt and economic growth: contemporary evidence from a developing economy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sam Kris Hilton
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Granger Causality ◽  
Public Debt ◽  
Consumption Expenditure ◽  
Government Consumption ◽  
Content Type ◽  
Long Run ◽  
Short Run ◽  
Investment Spending

Purpose Considering the continuous rise in the public debt stock of developing countries (particularly Ghana) with the unstable economic growth rate for the past decades and the recent borrowing because of the impact of COVID 19, this paper aims to examine the causal relationships between public debt and economic growth over time. Design/methodology/approach The paper uses a dynamic multivariate autoregressive-distributed lag (ARDL)-based Granger-causality model to test the causal relationships between public debt and economic growth [gross domestic product (GDP)]. Annual time-series data that spanned 1978–2018 were sourced from the World Bank Development Indicator database and the IMF fiscal Affairs Department Database and WEO. Findings The results reveal that public debt has no causal relationship with GDP in the short-run but there is unidirectional Granger causality running from public debt to GDP in the long run. Again, investment spending has a negative bi-directional causal relationship with GDP in the short-run but they have a positive bi-directional causal relationship in the long run. Conversely, no short-run causal relationship exists between government consumption expenditure and GDP but long-run Granger causality runs from government consumption expenditure to GDP. Finally, public debt has a positive impact on the inflation rate in the short run. Practical implications The findings imply that government(s) must ensure high fiscal discipline to serve as a precursor for the effective and efficient use of recent borrowing, that is, the loans should be used for highly prioritized projects (preferably investment spending) that are well evaluated and self-sustained to add positively to the GDP. Originality/value This paper provides contemporary findings to augment extant literature on public debt and economic growth by using variables and empirical models, which prior studies could not sufficiently cover in a developing country perspective and affirms that public debt contributes to GDP only in the long run.

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