scholarly journals Impact of fiscal and monetary policy on economic growth in Vietnam

2022 ◽  
Author(s):  
Le Thanh Tung
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Impulse Response Functions ◽  
Macroeconomic Policies ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Johansen Cointegration Test ◽  
The Impact ◽  
Fiscal And Monetary Policy

This paper uses the Johansen cointegration test and the Vector Error Correction Model (VECM) to study the impact of fiscal and monetary policy on economy growth in Vietnam during the period from quarter I/2004 to quarter II/2013. The results showed the cointegration relation between the macroeconomic policies and economic growth. Besides, the variance decomposition and impulse response functions from VECM model showed the impact of the two policies on economic growth were limited, in which the impact of the monetary policy on growth is greater than that of the fiscal policy on growth. Subsequently, the paper provides some recommendations to improve the efficiency of the implementation of these policies in Vietnam.

scholarly journals Effectiveness of Monetary Policy Instruments on Economic Growth in Jordan Using Vector Error Correction Model

2017 ◽  
Vol 9 (11) ◽  
pp. 194
Author(s):  
Rami Obeid ◽  
Bassam Awad
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Policy Instruments ◽  
Short Term ◽  
Correction Model ◽  
Vector Error Correction ◽  
Real Gdp ◽  
Vector Error ◽  
Effect Of Monetary Policy

The global financial crisis emphasized the important role of the prudent monetary policy in supporting economic growth through maintaining price stability. The monetary policy operational framework that was designed in 2008 was updated to include more instruments for managing monetary policy learning from the crisis lessons. Several studies analyzed various dimensions related to economic growth in Jordan such as Abdul-Khaliq, Soufan, and Abu Shihab (2013) and Assaf (2014), there were no studies that investigated the effect of monetary policy on economic growth in Jordan, at least recently, however. The study aims at measuring the effect of monetary policy instruments on the performance of Jordanian economy. Using quarterly data covering the period (2005-2015), an econometric model was examined using Vector Error Correction Model to assess the impact of monetary policy instruments on economic growth. The foremost advantage of VECM is that it has a nice interpretation of long-term and short-term equations. The results showed the existence of positive long-term and short-term effects of monetary policy instruments on the growth of real GDP. The model included three monetary policy instruments besides money supply. They are required reserve ratio, rediscount rate and overnight interbank loan rates as independent variables, and the real GDP growth as a dependent variable. The stationarity of the model time series was addressed. In addition, the stability of the model was tested using stability diagnostics tools. The results showed also an existence of inverse relationship between rediscount rate and economic growth in Jordan over both long and short terms.

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 An Empirical Analysis of The Impact of Islamic Banking on Real Output in Indonesia

2020 ◽  
Vol 11 (2) ◽  
pp. 329-345
Author(s):  
Hadi Sasana ◽  
Deni Ramdani ◽  
Ivo Novitaningtyas
Keyword(s):  
Economic Growth ◽  
Error Correction ◽  
Error Correction Model ◽  
Islamic Banking ◽  
Vector Error Correction Model ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Actual Output ◽  
The Impact

Abstract: The role and contribution of Islamic finance on economic growth in Indonesia has increased gradually and steadily. This is because the Islamic economy's universal and comprehensively basic principle is the primary foundation of Islamic banking. This research aimed to analyze the role of Islamic Banking on Indonesia's real sector during 2007.01 – 2016.04. This study used the Vector Error Correction Model (VECM) as a tool to analyze secondary data. The result showed that in Indonesia, sharia deposit positively and significantly influenced actual output in the short term. In addition, in the long-term, sharia financing positively and significantly influenced actual output. Moreover, Granger Causality Test proved the occurrence of one-way causality between actual output and inflation. Thus, Islamic banking can encourage actual output in Indonesia. The results of this study become a consideration for stakeholders and policymakers to pay more attention to strategies and policies that support economic growth in Indonesia.Abstrak: Perkembangan keuangan syariah di Indonesia semakin meningkat setiap tahunnya. Prinsip-prinsip dasar ekonomi syariah yang universal dan komprehensif merupakan landasan utama perbankan syariah. Tujuan penelitian ini untuk menginvestigasi peran perbankan syariah terhadap sektor riil di Indonesia selama periode 2007.01 – 2016.04. Penelitian ini menggunakan Vector Error Correction Model (VECM) sebagai alat untuk menganalisis data sekunder. Hasil penelitian menemukan bahwa dalam jangka pendek deposito syariah berpengaruh positif dan signifikan terhadap output rill. Selain itu, dalam jangka panjang pembiayaan syariah berpengaruh positif dan signifikan terhadap output riil di Indonesia. Lebih lanjut, Uji Kausalitas Granger membuktikan terjadinya kausalitas satu arah antara output riil dan inflasi. Dengan demikian, perbankan syariah mampu mendorong output riil di Indonesia. Hasil penelitian ini menjadi bahan pertimbangan bagi para pemangku kepentingan dan pengambil kebijakan untuk lebih memperhatikan strategi dan kebijakan yang mendukung pertumbuhan ekonomi di Indonesia.

scholarly journals Dampak ASEAN-China free trade agreement (ACFTA) terhadap pertumbuhan ekonomi Indonesia

2019 ◽  
Vol 15 (1) ◽  
pp. 1-14
Author(s):  
Azza Ayullah Kusuma
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Free Trade Agreement ◽  
Secondary Data ◽  
Trade Agreement ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
The Impact

The purpose of this study investigates the impact of ACFTA, Indonesian trade, the exchange rate on economic growth in Indonesia. The data used secondary data during 1997-2016 were sourced from UNCOMTRADE, ASEAN Statistics, and World Bank. The method used is a quantitative approach with vector error correction model (VECM). The findings of this study in the long run show that Indonesian trade, ACFTA has a positive and significant effect on economic growth, while the rupiah exchange rate variable has a negative and significant effect on economic growth

Analysing the impact of tourism foreign direct investment on economic growth

2016 ◽  
Vol 23 (5) ◽  
pp. 1042-1055 ◽  
Author(s):  
Sheereen Fauzel ◽  
Boopen Seetanah ◽  
R.V. Sannassee
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Vector Error Correction Model ◽  
Domestic Investment ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Tourism Sector ◽  
The Impact

The present study attempts to address the important question of whether foreign direct investment (FDI) flowing into the tourism sector has served to enhance economic growth in Mauritius for the period 1984–2014. Using a dynamic vector error correction model, and catering for dynamism, the results show that tourism FDI has indeed contributed to fostering economic growth; albeit the magnitude of the coefficient being relatively smaller than FDI in the non-tourism sector. A plausible explanation for such a finding may reside in the fact that the bulk of FDI flows in the non-tourism sectors while domestic investment predominates in the tourism sector in Mauritius. The findings also demonstrate a positive relationship between tourism development and economic growth, thus supporting the tourism-led growth hypothesis.

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.

Innovation, ICT penetration, trade and economic growth in developing and developed countries: a VECM approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Parul Singh ◽  
Areej Aftab Siddiqui
Keyword(s):  
Economic Growth ◽  
Error Correction ◽  
Developing Nations ◽  
Vector Error Correction Model ◽  
Correction Model ◽  
Content Type ◽  
Vector Error Correction ◽  
Vector Error ◽  
Short Run ◽  
Developed Nations

Purpose The development in information communication and technology (ICT) has led to many changes such as reorganization of economics, globalization and trade. With more innovation processes being organized and adopted across technologies, trade, etc., these are getting more closely related and needs fresh research perspective. This study aims to empirically investigate the interrelationship between ICT penetration, innovation, trade and economic growth in 20 developed and developing nations from 1995 to 2018. Design/methodology/approach The present paper examines both long-run and short-run relationships between the four variables, namely, innovation, ICT penetration, trade and economic growth, by applying panel estimation techniques of regression and vector error correction model. ICT penetration and innovation indices are constructed using principle component analysis technique. Findings The findings of the study highlight that for developed nations, growth, trade and innovation are significantly interlinked with no significant role of ICT penetration While for developing nations, significant relationship is present between growth and trade, ICT penetration and innovation. With respect to trade, in case of developed nations, significant relationship is present with ICT penetration. While for developing nations there is no significant result for trade promotion. On further employing the vector error correction model, the presence of short run causality between growth, trade and innovation in case of developed nations is established but no such causality between variables for developing nations is seen. Originality/value The present paper adds to the existing strand of literature examining interlinkage between innovation and growth by introducing new variables of ICT penetration and innovation.

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