scholarly journals What Determines Balance of Payments: A Case of Pakistan

2018 ◽  
Vol 2 (1) ◽  
pp. 47
Author(s):  
Syeda Azra Batool ◽  
Tahir Memood ◽  
Atif Khan Jadoon

Distortion in balance of payments is one of the dominant causes for the sluggish economic condition of Pakistan. The present article has focused to scrutinize the relationship of the balance of payments to its certain determinants that are actually blamable or not for its distortion. The robust ARDL structure has been utilized to develop the bound testing approach to co-integration and error correction models on data set for 1972-2013.The bound test declares that there exists stable long run relationship of balance of payments to its determinants. The upshots indicate that real exchange rate inversely influences the balance of payments not only in the long run but also in the short run. Interest rate inversely affects the balance of payment in the long run but positively affects in the short run .Fiscal balance affects the BOP negatively in the long and short run simultaneously. As regards the real GDP, it moves the BOP in the positive direction in both long and short run. The money supply cast a positive influence on the BOP in the short run but negative effect in the long run. So the need of the hour is that the real GDP of Pakistan should be increased by the deliberate policy of the government. Because it is the GDP that can increase our savings consumption and government expenditures and exports and can improve balance of balance of payment.

2009 ◽  
Vol 4 (1) ◽  
pp. 51-61 ◽  
Author(s):  
Vladimir Vladimirov ◽  
Maria Neycheva

Determinants of Non-Linear Effects of Fiscal Policy on Output: The Case of BulgariaThe paper illuminates the non-linear effects of the government budget on short-run economic activity. The study shows that in the Bulgarian economy under a Currency Board Arrangement the tax policy impacts the real growth in the standard Keynesian manner. On the other hand, the expenditure policy exhibits non-Keynesian behavior on the short-run output: cuts in government spending accelerate the real GDP growth. The main determinant of this outcome is the size of the discretionary budgetary changes. The results imply that the balanced budget rule improves the sustainability of public finances without assuring a growth-enhancing effect.


2016 ◽  
Vol 8 (11) ◽  
pp. 96
Author(s):  
Mustapha A. Akinkunmi

The oil sector that eased the financial constraint of Nigerian government in the 1970s is presently acting as the source of financial constraints to the country due to a continuous decline in government revenue, arising from the recent drastic fall in world crude oil prices. This calls for the government to diversify its revenue base through improving taxation. This study examined the influence of economic performance on the government revenue as well as the various sources of tax revenues in Nigeria. Monthly data spanning 1999 to 2016 were utilized to estimate vector error correction models (VECM) for five sources of government tax revenues based on data availability. Empirical results revealed that there is a significant relationship between real GDP and real company income tax revenues, and between real GDP and real excise duty revenues in the long run. However, in the short run, the one-year lag of tax revenue varieties poses a significant influence on the various sources of tax revenues.


Author(s):  
P. Soumya ◽  
R. A. Yeledhalli

The study examines the impact of cotton imports on the real GDP (Gross Domestic Product) of Indonesia for a period from 1992 to 2018 using ARDL approach and Granger causality analysis. Results of the study indicated that cotton imports have negative effect on economic growth. For every 1% increase in cotton imports the real GDP decreased by 0.107% in the long run. Any disequilibrium in the model is adjusted with a high speed of adjustment of 107.7% in less than a year. Shocks and the trend are adjusted in less than one year. There is no causality between imports of cotton and the real GDP. The study suggested effort should be taken by the government to increase yield of cotton by the use of technology and also a need to initiate farmers to take up cotton farming. 


2018 ◽  
Vol 7 (1) ◽  
pp. 77-90
Author(s):  
Musa Abdullahi Sakanko ◽  
Joseph David

Rising population is an asset, provided, the skills of the workforce are used to the maximum extent. If not appropriately channelized, it can be a liability for a nation. A skilled and hardworking population can emerge as a foundation for a country’s development. This study examines the validity of Malthusian Theory in Nigeria using time series data from 1960 to 2016, employs the ARDL bound test techniques. The result shows that in the long-run, population growth and food production move proportionately, while population growth poses a depleting effect on food production in the short-run, thus validating the incidence of Malthusian impact in Nigerian economy in the short-run. The researcher recommended the government should strategize plans, which will further intensify family planning and birth control measure, compulsory western education and revitalization of the agricultural sector.DOI: 10.150408/sjie.v7i1.6461


2018 ◽  
Vol 37 (2) ◽  
Author(s):  
Adenuga Fabian Adekoya ◽  
Nor Azam Abdul-Razak

This study examines the link between unemployment and violence by controlling for income and security expenditure as an antidote to reduce violence in Nigeria. Violence claims many lives and properties in the country, which further increased the demand for public security as tax on the nation’s resources. Also, the increased unemployment in Nigeria, deserving urgent attention to be reduced, as literature has pointed out, causes idleness, deception, frustration and anger. The idea of criminal motivation and strain as an inducement to violence are supported by evidence. Considering the nature of the variables in this study, we tested for endogeneity by using annual data set from 1980 to 2015 before proceeding to test for the long-run and short-run relationship. The Bound Test used to test the cointegration while the Autoregressive Distributed Lag Model (ARDL) approach was used to conduct endogeneity test. ARDL Instrumental Variable is also employed to determine long-run and short-run estimates. The results showed that unemployment causes violence while income as a variable to economic growth reduces violence at the 1% level of significance. Similarly, the deterrence variable of security expenditure adversely affects violence at the 10% level of significance. Therefore, this study suggests policy to promote economic growth as the means of income-employment generation among the youth and the unemployed. Youth programs should be provided especially among the unemployed by granting credit facilities to finance their own projects and further strengthen the deterrence institutions. RESUMEN Este estudio examina el vínculo entre el desempleo y la violencia mediante el control de los ingresos y el gasto de seguridad, como un antídoto para reducir la violencia en Nigeria. La violencia se cobra muchas vidas y propiedades en el país, lo que aumenta aún más la demanda de seguridad pública, traducida como un impuesto a los recursos de la nación. Además, el aumento del desempleo en Nigeria, la cual merece una atención urgente que se reduzca ya que, la literatura señala, provoca ociosidad, engaño, frustración e ira. La idea de la motivación y la tensión delictiva como un incentivo a la violencia está respaldada por la evidencia. Teniendo en cuenta la naturaleza de las variables en este estudio, probamos la endogeneidad mediante el uso de datos anuales de 1980 a 2015, antes de proceder a la prueba de la relación de largo y corto plazo. El Bound Test se usó para probar la cointegración, mientras que el enfoque del Modelo de retardo distribuido autorregresivo (ARDL), se usó para realizar pruebas de endogeneidad. La variable instrumental de ARDL también se emplea para determinar estimaciones a largo y corto plazo. Los resultados mostraron que el desempleo causa violencia; mientras que el ingreso, como variable del crecimiento económico, reduce la violencia, al nivel de significancia del 1%. De manera similar, la variable de disuasión del gasto en seguridad afecta adversamente la violencia, al nivel de significancia del 10%. Por lo tanto, este estudio sugiere una política para promover el crecimiento económico como el medio de generación de empleo-empleo entre los jóvenes y los desempleados. El empoderamiento de la juventud debe proporcionarse especialmente entre los desempleados mediante la concesión de servicios de crédito para financiar proyectos propios y fortalecer aún más las instituciones de disuasión.


2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Olufemi Samuel Adegboyo ◽  
Sunday Anderu Keji ◽  
Oluwadamilola Tosin Fasina

AbstractThis study examines the impact of fiscal, monetary and trade policies on Nigerian economic growth from 1985 to 2020. This study adopts endogenous growth model (AK model) as its theoretical framework. The unit root test results reveal that there is mixed level of stationarity in the variables. The bound test result shows that the variables cointegrate. The ARDL long-run result shows that fiscal policies stimulate economic growth, while on the contrary, trade policies deter Nigerian economic growth. The short-run result shows that the fiscal policies has an inconsistent impact on Nigerian economic growth and thus differs from the long-run result; while government spending continues to drive economic growth in Nigeria, government revenues have no effect on the growth of the economy. The result of the impact of monetary policies shows that interest rate impels growth of the economy while money supply deters growth of Nigeria’s economy; lastly, the trade policies maintain her negative influence on the economy in both the long run and short run. Sequel to the findings, the study recommends the following: Policymakers should place more emphasis on using fiscal policy which was found to be stimulating the country's growth rate. Whenever it is expedient to use monetary policy to stimulate economic growth, policy makers should make use of interest rates as it stimulates the growth of the economy in the short run. The government should review her trade policies to reduce import by encouraging consumption of local products and motivate exporters of goods (raw material) to refine the products before exporting such.


Author(s):  
A.L.M. Aslam

In the global economic administration, tax revenue has been identified as the engine of the government expenditure, but the relationship of them was not investigated econometrically, this situation formulated a research gap for tasting the relationship of them. The aim of this study was to examine the Cointegration relationship among the tax revenue and the government expenditure in Sri Lanka. This study considered two time series variables such as the tax revenue and the government expenditure. The tax revenue was considered as the independent variable and the government expenditure was considered as the dependent variable. The sample period of this study was from 1950 to 2013.The Cointegration technique was used to check the long run relationship and the Error Correction Mechanism was employed to investigate the short run behavior of the tax revenue on the government expenditure. According to the empirical results, the R-squared of the estimated model was 0.99. In the meantime, the Durbin Watson statistics was 0.828. However, this model did not suffer from the spurious problem because the residual of this model was stationary. The tax revenue has sustained positive relationship with government expenditure. And also, the partial coefficients of tax revenue and its probability values in the estimated model were 0.695 (0.000) in short run and 1.031 (0.000) in long run periods. Therefore, the tax revenue and government expenditure had cointegrated at level form I(0) and maintained the long and short run relationship between them.


Author(s):  
Issa Moh’d Hemed ◽  
Suleiman Malik Faki ◽  
Salim Hamad Suleiman

Aims: This study examined the short run and long run dynamic relationship between economic growth and environmental pollution in Brunei. We adoptedAuto Regressive Distributed Lag (ARDL) model to scrutinize the existence of the Environmental Kuznets Curve (EKC) among the studying variables by using time series data cover the period of 1974 to 2014. Methodology: The ARDL bound test revealed the existence of long-run relationship among the integrated variables when CO2 chosen as a dependent variable. Results: The results support the existences of EKC hypotheses in the long-run whereas in the short-run an inverted U-shaped curve was not confirmed between GDP and CO2 in Brunei. The results of Granger causality based on VECM analysis have shown unidirectional causality runs from economic growth to CO2 in the short run. Further analysis through stability test indicates the coefficients in the model are stable and do not suffers with structural break within the time taken in the study. Conclusion: The government of Brunei should proceed to target the sustainable means of production, which has an environmental friendly and consumes less energy to enhance economic growth and maintain environmental quality in the long run.


2019 ◽  
Vol 27 (1) ◽  
pp. 35-48 ◽  
Author(s):  
Sima Rani Dey ◽  
Mohammed Tareque

Purpose The purpose of this paper is to assess the empirical cointegration, long-run and short-run dynamics as well as causal relationship between electricity consumption and real GDP in Bangladesh for the period of 1971‒2014. Design/methodology/approach Autoregressive Distributed lag (ARDL) “Bound Test” approach is employed for the investigation in this study. Findings Both short-run and long-run coefficients are providing strong evidence of having positive significant association between electricity consumption and GDP. Our long-run results remain robust to different measurements and estimators as well. The study reveals the unidirectional causal flow running from per capita electricity consumption to per capita real GDP in the short run. The study result also yields strong evidence of bidirectional causal relationship between per capita electricity consumption and per capita real GDP in the long run with feedback. It is suggested that both electricity generation and conservation policy will be effective for Bangladesh economy. Originality/value In prior studies, lack of causality between electricity consumption and GDP is due to the omitted variables. Combined effects of public spending and trade openness on GDP and electricity consumption are also considerable.


2020 ◽  
Vol 11 (6) ◽  
pp. 196
Author(s):  
Shanjida Chowdhury ◽  
K. B. M. Rajibul Hasan ◽  
Mahfujur Rahman ◽  
K. M. Anwarul Islam ◽  
Nurul Mohammad Zayed

Developing countries face environmental degradation crisis due to the consumption of nonrenewable energy for economic development induces ecological destruction. However, the consequences of environmental deterioration can no longer be overlooked. Using data from 1990 from 2018, this study scrutinized the long-run equilibrium along with the trend among consumption of renewable energy, carbon dioxide emissions, Population, and economic growth in Bangladesh. This study reveals the significant cointegration of renewable energy with controlled variables using the ARDL bound test. Also, ECM with ARDL unrestricted version enables us to decide the speed of adjustment is 27.647% addressed for short-run elasticity in the long run. Stability and further diagnostic tests are performed for model post estimation and validation. Also, it needs further steps from the government side to promote renewable energy that boosts economic development.


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