scholarly journals Relationship between Macroeconomic Policy and Long-Run Economic Growth of Nepal

2021 ◽  
Vol 3 (2) ◽  
pp. 265-276
Author(s):  
Mohan Khanal
Keyword(s):  
Economic Growth ◽  
Trade Openness ◽  
Production Model ◽  
Macroeconomic Variables ◽  
Long Run ◽  
Fixed Capital Formation ◽  
Investment Growth ◽  
Bound Test ◽  
Cointegration Relationship

 Background: The paper is an attempt to find the long-run relationship between macroeconomic variables and economic growth in Nepal. The variables in the study are run across the Cobb-Douglas production model. Objective: This paper examines the relationship between Gross Fixed Capital Formation, Population, Trade openness, Money Supply and GDP growth economic growth in Nepal. Method: The ARDL bound test and Error Correction model incorporated in the study to examine the long-run relationship among macroeconomic variables. Conclusion: Based on the Bound Test of F-statistics the Cointegration Result exists among the variable and ARDL (1,1,1,1,1) relation is estimated. Implications: Since the study has found the existence of a cointegration relationship on the variables of the study and the long-term relationship among economic growth is significant with GFCF. The policy should be targeted at investment growth in Nepal.

scholarly journals Assessment of Long and Short Run Relationship Amongst Macroeconomic Variables and Economic Growth of Nepal

2019 ◽  
pp. 48-87
Author(s):  
Shikha Pokhrel ◽  
Chakra Bahadur Khadka
Keyword(s):  
Economic Growth ◽  
Trade Openness ◽  
Government Expenditure ◽  
Capital Formation ◽  
Fixed Capital ◽  
Macroeconomic Variables ◽  
Long Run ◽  
Fixed Capital Formation ◽  
Short Run ◽  
Adf Test

 This paper examines the long and short run relationship among selected macroeconomic variables and economic growth of Nepal. The objective of the research is to examine empirically the long and short run relationship among macroeconomic variables; gross fixed capital formation, human capital, government expenditure, foreign aid, and trade openness on economic growth of Nepal. The study period spanned from 1975 to 2016. The data has the annual frequency. The time series properties of the data were, first, analyzed using the Augmented Dickey-Fuller (ADF) test and then Auto-Regressive Distributive Lag (ARDL) approach to cointegration is employed to assess the direction of impact and long-run relationships between the variables. Besides these, other diagnostic tests are also conducted. The ARDL bound test analysis depicts the presence of cointegration relationship between real GDP and employed macroeconomic determinants. The negative and significant error correction coefficient further provides substantial evidence that there is long-run association among real gross domestic product and selected macroeconomic variables. The ARDL model shows that Gross fixed capital formation and government expenditure have a significant positive relationship on economic growth in the long run while trade openness has a significant negative relationship on economic growth in the long run. Thus, the findings suggest that GFCF and GE are the major macro determinants to robust the economic growth of Nepal. In order to achieve the desired rate of economic growth it is suggested that there should be a continuous investment in gross fixed capital formation including plants, machinery, raw materials, industrial buildings and technology (research and development). It is also suggested that structural changes should be made in school institutions with the provision of providing quality education with cognitive skills and added resources through quality and skilled teachers. Nepal must have more effective trade openness, particularly by productively controlling import of consumption goods, and by introducing import substitution policies, in boosting their economic growth through international trade.

scholarly journals Examining the Relationship Between Energy Consumption, Economic Growth and Environmental Degradation Indonesia: Do Capital and Trade Openness Matter?

2021 ◽  
Vol 10 (4) ◽  
pp. 769-778
Author(s):  
Nurul Anwar ◽  
Khalid Eltayeb Elfaki
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Environmental Degradation ◽  
Trade Openness ◽  
Ordinary Least Squares ◽  
Capital Formation ◽  
Fixed Capital ◽  
Long Run ◽  
Fixed Capital Formation ◽  
The Relationship

This paper examines the relationship between energy consumption, economic growth, and environmental degradation in Indonesia in 1965-2018 with the inclusion of gross capital formation and trade openness as relevant factors. The autoregressive distributed lag model to cointegration, fully modified ordinary least squares, dynamic ordinary least squares, and canonical cointegrating regression approach applied to estimate this relationship. The result of cointegration confirms the existence of a cointegration relationship between energy consumption, economic growth, gross fixed capital formation, trade openness, and environmental degradation. The empirical result, in the long run, indicates that energy consumption, economic growth, and trade openness have a positive relationship with environmental degradation. However, the gross fixed capital formation was found to be negatively associated with environmental degradation. This implying that gross fixed capital formation plays a pivotal role to reduce environmental degradation in Indonesia.  The error correction model coefficient indicates that the deviation of CO2 emissions from its long run equilibrium will be adjusted by 0.53% through the short run channel per annual. The findings of this paper propose implementing an energy policy that focuses on energy from environmentally friendly sources. Reverse the effect of openness to the international markets to improve and facilitate access to advanced and environmentally friendly technologies to mitigate environmental degradation and improve environmental quality.

Financial Development and Economic Growth Nexus in Pakistan: An Analysis of Bound Testing Approach

2018 ◽  
Vol 2 (1) ◽  
pp. 10 ◽  
Author(s):  
Hina Ali ◽  
Zahra Masood Bhutta
Keyword(s):  
Economic Growth ◽  
Money Supply ◽  
Financial Development ◽  
Trade Openness ◽  
Domestic Saving ◽  
Economic Policies ◽  
Distributed Lag ◽  
Long Run ◽  
Domestic Savings ◽  
Bound Test

This study researches on the financial development and economic growth in Pakistan. The study demonstrates the correlation connecting financial development and economic growth from the range of time, 1974 - 2014. For checking the stationarity of variables, Augmented Dickey-Fuller (ADF) and Philip-Peron (P.P) unit root technique is applied. To elaborate long-run relationship, ARDL (autoregressive distributed lag) and Bound test is conducted. By ARDL technique, study investigate that Gross Domestic Product, Money supply, Exchange rate, Gross fixed capital formation, Domestic Savings and Trade Openness are assimilated. According to research findings: economic growth directly related to money supply (M2) and domestic saving in long-run but money supply illustrates insignificant impact. The study uses GDP as endogenous variable and represents Economic growth. While M2 as exogenous variable which represents financial development and financial liberalization. Current researches seek to establish direct relation of economic growth with trade openness and money supply. Pakistani researchers aim to examine the association of economic policies with financial satisfaction over the globe.  

scholarly journals TRADE OPENNESS AND ECONOMIC GROWTH IN MALAYSIA FROM 1980-2018

2020 ◽  
Vol 5 (2) ◽  
pp. 55-63
Author(s):  
Khairunisah Kamsin ◽  
James Alin ◽  
Mori Kogid
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Trade Openness ◽  
Unit Root Test ◽  
Wald Test ◽  
Real Effective Exchange Rate ◽  
Series Data ◽  
Long Run ◽  
The Impact ◽  
Bound Test

This study analyses the impact of trade openness on economic growth, between 1980-2018. This study using the unit root test (ADF) and the Philip and Perron (PP) test to examine the stationary of the time series data, the ARDL test to show the cointegration and long-run relationship between variables, and the Wald test to show the short-term effect of the variables. The finding shows that all variables have a long-run relationship with economic growth and the bound test shows that foreign direct investment (FDI) and the Real Effective Exchange Rate (REER) have a positive and significant relationship with economic growth. The study also found that openness is correlated with economic growth in Malaysia.

scholarly journals Energy and Ecological Sustainability: Challenges and Panoramas in Belt and Road Initiative Countries

2018 ◽  
Vol 10 (8) ◽  
pp. 2743 ◽  
Author(s):  
Abdul Rauf ◽  
Xiaoxing Liu ◽  
Waqas Amin ◽  
Ilhan Ozturk ◽  
Obaid Rehman ◽  
...  
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Co2 Emissions ◽  
Trade Openness ◽  
Least Square ◽  
Belt And Road Initiative ◽  
Ordinary Least Square ◽  
Long Run ◽  
Fixed Capital Formation ◽  
Belt And Road

Innovation and globalization fosters a tendency towards multiparty collaboration and strategic contacts among nations. A similar path was followed by the Chinese administration in 2013, with its “Belt and Road Initiative” (BRI). The most important objective of the present fact-finding study was to demonstrate the links between economic growth, energy consumption, urbanization, gross fixed capital formation, trade openness, financial development and carbon emissions (ecological degradation) from a panel of 47 BRI economies, over a time span of 1980 to 2016. Dynamic panel estimations (dynamic ordinary least square (DOLS) and fully modified ordinary least square (FMOLS)) were engaged to examine the long-run links between the subjected variables. Synchronized outcomes for the full panel show that energy consumption, gross fixed capital formation, economic growth, financial development, and urbanization unfavorably led to environmental degradation (CO2 emissions). However, trade openness is negatively correlated with emissions. Furthermore, pairwise panel Granger causative estimations justified bi-directional links from all regressors towards CO2 emissions, except for trade openness, which had unidirectional ties with environmental quality. In cross-country, long-run assessments, different results were found, with CO2 emissions being greatly increased by economic growth in all countries and energy consumption in 30 countries; other predictors testified to some mixed interactions with CO2 emissions in the country-level examination. The reported investigation provides some noteworthy guiding principles and policy inferences aimed at governments and ecological supervisory administrations, suggesting assertive moves towards truncated used of carbon fossil fuels and dependency on renewable energy, establishing waste and water treatment plants, familiarizing themselves with the concept of a green economy, and making the general public aware of eco-friendly investments in BRI economies.

PENGARUH INFRASTRUKTUR SECARA SPASIAL TERHADAP KONVERGENSI PERTUMBUHAN EKONOMI DI INDONESIA

INFO ARTHA ◽  
2017 ◽  
Vol 1 ◽  
pp. 17-28
Author(s):  
Anisa Fahmi
Keyword(s):  
Economic Growth ◽  
Regional Economics ◽  
Developed Countries ◽  
Road Infrastructure ◽  
Long Run ◽  
Catch Up ◽  
The Developed Countries ◽  
Positive Effect ◽  
Neoclassical Growth Theory

Motivated by inter-regional disparities condition that occurs persistently, this study examines the Indonesian economy in the long run in order to know whether it tends to converge or diverge. This convergence is based on the Solow Neoclassical growth theory assuming the existence of diminishing returns to capital so that when the developed countries reach steady state conditions, developing countries will continuously grow up to 'catch-up' with developed countries. Based on regional economics perspective, each region can not be treated as a stand-alone unit,therefore, this study also focuses on the influence of spatial dependency and infrastructure. Economical and political situations of a region will influence policy in that region which will also have an impact to the neighboring regions. The estimation results of spatial cross-regressive model using fixed effect method consistently confirmed that the Indonesian economy in the long term will likely converge with a speed of 8.08 percent per year. Other findings are road infrastructure has a positive effect on economic growth and investment and road infrastructure are spatially showed a positive effect on economic growth. In other words, the investment and infrastructure of a region does not only affect the economic growth of that region but also to the economy of the contiguous regions. 

Stock Market Development And Economic Growth in Nigeria

1998 ◽  
Vol 2 (1) ◽  
pp. 33-38 ◽  
Author(s):  
John C. Anyanwu
Keyword(s):  
Economic Growth ◽  
Risk Management ◽  
Stock Market ◽  
Conceptual Framework ◽  
Corporate Control ◽  
Market Development ◽  
Political Environment ◽  
Stock Market Development ◽  
Long Run

Is the stock market development important for economic growth in Nigeria? One line of research argues that it is not; another line stresses the importance of stock market development in allocating capital, acquisition of information about firms, easing risk management, mobilization of savings, and exerting corporate control. Indeed, some theories provide a conceptual framework for the belief that larger, more efficient stock markets boost economic growth. This article examines whether there is a strong empirical association between Nigerian stock market development and long-run economic growth. Our empirical results suggest that the Nigerian stock market development is positively and strongly associated with long-term economic growth. This implies that Nigerian policymakers should make concerted efforts at removing obstacles to stock market development while creating and sustaining an enabling macroeconomic and political environment for the market’s development.

Long run apartment price dynamics in Swedish and German cities

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sviatlana Engerstam
Keyword(s):  
Banking Sector ◽  
Cointegration Analysis ◽  
Price Dynamics ◽  
Long Term Effects ◽  
Content Type ◽  
Macroeconomic Variables ◽  
Price Elasticities ◽  
Long Run ◽  
German Cities

PurposeThis study examines the long term effects of macroeconomic fundamentals on apartment price dynamics in major metropolitan areas in Sweden and Germany.Design/methodology/approachThe main approach is panel cointegration analysis that allows to overcome certain data restrictions such as spatial heterogeneity, cross-sectional dependence, and non-stationary, but cointegrated data. The Swedish dataset includes three cities over a period of 23 years, while the German dataset includes seven cities for 29 years. Analysis of apartment price dynamics include population, disposable income, mortgage interest rate, and apartment stock as underlying macroeconomic variables in the model.FindingsThe empirical results indicate that apartment prices react more strongly on changes in fundamental factors in major Swedish cities than in German ones despite quite similar development of these macroeconomic variables in the long run in both countries. On one hand, overreactions in apartment price dynamics might be considered as the evidence of the price bubble building in Sweden. On the other hand, these two countries differ in institutional arrangements of the housing markets, and these differences might contribute to the size of apartment price elasticities from changes in fundamentals. These arrangements include various banking sector policies, such as mortgage financing and valuation approaches, as well as different government regulations of the housing market as, for example, rent control.Originality/valueIn distinction to the previous studies carried out on Swedish and German data for single-family houses, this study focuses on the apartment segment of the market and examines apartment price elasticities from a long term perspective. In addition, the results from this study highlight the differences between the two countries at the city level in an integrated long run equilibrium framework.

Does Public Debt Service Expenditure Crowd-Out Economic Growth? Empirical Evidence from an African Developing Country

2019 ◽  
Vol 64 (3) ◽  
pp. 23-38
Author(s):  
Talknice Saungweme ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Time Series Data ◽  
Policy Formulation ◽  
Debt Service ◽  
Series Data ◽  
Long Run ◽  
Short Run ◽  
The Impact

Abstract This paper contributes to the ongoing debate on the impact of public debt service on economic growth; and it provides an evidence-based approach to public policy formulation in Zimbabwe. The empirical analysis was performed by applying the autoregressive distributed lag (ARDL) technique to annual time-series data from 1970 to 2017. The study findings reveal that the impact of public debt service on economic growth in Zimbabwe is negative in the short run but positive in the long run. The results are suggestive of the existence of a crowding-out effect of public debt service in Zimbabwe in the short run and a crowding-in effect in the long run. In view of these findings, the government should consider fiscal and financial policies that promote a constant supply of long-term finance, long-term fixed investments, and extension of a government securities maturity structure so as to ensure sustainable short- and long-term public debt service expenditures. The study further recommends the strengthening of non-distortionary revenue mobilisation reforms to reduce market distortions and boost domestic investment.

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