Forming Sources of Long-run Growth: How to Understand Them?

2014 ◽  
pp. 4-20 ◽  
Author(s):  
G. Idrisov ◽  
S. Sinelnikov-Murylev
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Economic Policy ◽  
Business Cycle ◽  
Capital Markets ◽  
Productivity Growth ◽  
Government Spending ◽  
Long Run ◽  
Accelerate Growth ◽  
Budget Institutions

The paper analyzes the inconsequence and problems of Russian economic policy to accelerate economic growth. The authors consider three components of growth rate (potential, Russian business cycle and world business cycle components) and conclude that in order to pursue an effective economic policy to accelerate growth, it has to be addressed to the potential (long-run) growth component. The main ingredients of this policy are government spending restructuring and budget institutions reform, labor and capital markets reforms, productivity growth.

scholarly journals The perspectives of long-term growth in Russia

2015 ◽  
Vol 65 (s1) ◽  
pp. 7-23 ◽  
Author(s):  
Georgy Idrisov ◽  
Sergey Sinelnikov-Murylev
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Economic Policy ◽  
Business Cycle ◽  
Productivity Growth ◽  
Government Spending ◽  
Long Run ◽  
Accelerate Growth ◽  
Budget Institutions

The paper analyses the inconsequence and problems of Russian economic policy to accelerate economic growth. The authors consider three components of growth rate (potential, Russian business cycle, and world business cycle components) and conclude that in order to pursue an effective economic policy to accelerate growth, it has to be addressed to the potential (long-run) growth component. The main ingredients of this policy are government spending restructuring and budget institutions reform, labour and capital markets reform as well as productivity growth.

Budget Policy and Economic Growth

2013 ◽  
pp. 35-59 ◽  
Author(s):  
G. Idrisov ◽  
S. Sinelnikov-Murylev
Keyword(s):  
Economic Growth ◽  
Policy Implementation ◽  
Government Spending ◽  
Limited Budget ◽  
Long Run ◽  
Budget Policy ◽  
Short And Long Term ◽  
Budget Institutions ◽  
Expenditure Structure

The paper analyzes the prior approaches to budget policy implementation in the context of accelerating economic growth. The authors review the academic issues of short and long term economic growth and discuss the Russian budget policy opportunities and constraints. The authors conclude that (1) in the current situation Russia has quite limited budget measures to smooth economic growth; (2) options to raise total government spending in short and middle-run perspective are absent, and, thus, (3) it is needed to change the expenditure structure along with transforming budget institutions in order to create preconditions for long-run economic growth.

scholarly journals The Nexus of Government Spending, Price, Output, and Money in the ECOWAS Sub-Region: Evidence from Panel ARDL and Causality Approach

2021 ◽  
Vol 35 (1) ◽  
pp. 71-90
Author(s):  
Matthew Abiodun Dada ◽  
Sunday Mauton A. Posu ◽  
Osaretin Godspower Okungbowa ◽  
Bamidele P. Abalaba
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Exchange Rate ◽  
Money Supply ◽  
Government Spending ◽  
Population Growth Rate ◽  
Living Standard ◽  
Panel Ardl ◽  
Long Run ◽  
Short Run

Abstract The question of how macroeconomic variables dynamically interact is very crucial in any broad-based economic integration aiming at expanding economic growth and living standard in any human society. This study examined the nexus of government spending, price, output, and money in the ECOWAS sub-region using panel ARDL and causality approach. Data covering the period (1981–2019) were collected mainly from the latest version of the World Development Indicators. The result showed a positive relationship between government spending with GDP, import, exchange rate, unemployment rate, and population growth rate but a negative relationship between government spending with inflation, money supply, export, and interest rate. The result further showed short-run unidirectional causality running from government spending to inflation, money supply to inflation as well as money supply to GDP. Short-run bi-directional causality existed between GDP and inflation but none between government spending and GDP nor between government spending and money supply. The result of long-run Granger causality test showed bi-directional causality between government spending with inflation, government spending, and money supply; GDP and inflation; and GDP and money supply. Unidirectional causality ran from GDP to government spending; and money supply to inflation. The overall implication of this study established that an increase in government spending lowered inflation and raised the living standard of people in the ECOWAS sub-region in the long run. The study therefore concluded that any rise in import, unemployment rate, exchange rate, and population growth rate would raise government spending growth rate in the short run; and an increase in government spending would shrink inflation and boost economic growth and living standard in the long run.

Government spending shocks and economic growth: additional evidence from cyclical behavior of fiscal policy

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olumide Olusegun Olaoye ◽  
Ukafor Ukafor Okorie ◽  
Oluwatosin Odunayo Eluwole ◽  
Mahmood Butt Fawwad
Keyword(s):  
Economic Growth ◽  
Business Cycle ◽  
Government Spending ◽  
Generalized Method Of Moments ◽  
The State ◽  
Fiscal Policies ◽  
Asymmetric Effect ◽  
Content Type ◽  
Spending Shocks ◽  
The Business Cycle

PurposeThis study examines the asymmetric effect of government spending on economic growth in Nigeria over the period 1980–2017. Specifically, this study investigates whether the response of economic growth to government spending shocks differs according to the nature of shocks on them. In addition, the authors examine whether the stabilizing effects of fiscal policies are dependent on the state of the business cycle.Design/methodology/approachThe study adopts the linear fiscal reaction function in addition to the nonlinear regression model of Hatemi-J (2011, 2012), Granger and Yoon (2002), which allows us to separate negative shocks from positive shocks to government spending. Similarly, the authors adopt the generalized method of moments (GMM) techniques of Hansen (1982) to account for simultaneity and endogeneity problems inherent in dynamic model.FindingsThe authors’ findings reveal that there is evidence of asymmetry in the government spending–economic growth nexus in Nigeria over the period of study. Specifically, the authors find that the response of economic growth to government spending shocks differs according to the nature of shocks on them. More specifically, the study established that the stabilizing effects of fiscal policies are dependent on the state of the business cycle.Originality/valueUnlike the traditional method of modeling asymmetry, which adopts the simple inclusion of a squared government spending term or by the inclusion of a cubic government spending term, the model adopted in this study allows us to model shocks and show how the responses of economic growth to government expenditure differ according to the nature of shocks on them.

A NOTE ON INFLATION, ECONOMIC GROWTH, AND INCOME INEQUALITY

2009 ◽  
Vol 13 (1) ◽  
pp. 138-147 ◽  
Author(s):  
Yi Jin
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Income Inequality ◽  
Endogenous Growth ◽  
Money Growth ◽  
Relative Importance ◽  
Long Run ◽  
Endogenous Growth Model ◽  
The Relationship ◽  
Negative Growth

This paper develops a monetary endogenous growth model with capital and skill heterogeneity to analyze the relationship among inflation, growth, and income inequality. In the model inflation, growth, and inequality are jointly determined. We show that an increase in the long-run money growth rate raises inflation and reduces growth, but its effect on income inequality depends on the relative importance of the two types of heterogeneity. Inequality shrinks with the rise of inflation when capital heterogeneity dominates and enlarges when skill heterogeneity dominates. Therefore, our model supports a negative (positive) inflation–inequality relationship and a positive (negative) growth–inequality relationship when capital (skill) heterogeneity dominates. In any event, inflation and growth are negatively related.

On the Effectiveness of Growth- Enhancing Policies in a Model of Growth Without Scale Effects

2002 ◽  
Vol 3 (3) ◽  
pp. 339-346 ◽  
Author(s):  
Lutz G. Arnold
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Human Capital ◽  
Population Growth ◽  
Capital Accumulation ◽  
Scale Effects ◽  
Growth Models ◽  
Empirical Studies ◽  
Human Capital Accumulation ◽  
Accelerate Growth

Abstract Standard R&D growth models have two disturbing properties: the presence of scale effects (i.e., the prediction that larger economies grow faster) and the implication that there is a multitude of growth-enhancing policies. Recent models of growth without scale effects, such as Segerstrom's (1998), not only remove the counterfactual scale effect, but also imply that the growth rate does not react to any kind of economic policy. They share a different disturbing property, however: economic growth depends positively on population growth, and the economy cannot grow in the absence of population growth. The present paper integrates human capital accumulation into Segerstrom's (1998) model of growth without scale effects. Consistent with many empirical studies, growth is positively related not to population growth, but to investment in human capital. And there is one way to accelerate growth: subsidizing education.

scholarly journals FDI and Economic Growth in EU13 Countries: Cointegration and Causality Tests

2020 ◽  
Vol 12 (3) ◽  
pp. 47-63
Author(s):  
Vlatka Bilas ◽  
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
European Union ◽  
Annual Data ◽  
Foreign Direct Investments ◽  
Causality Test ◽  
Panel Ardl ◽  
Long Run ◽  
Causality Tests ◽  
The Relationship

Foreign direct investments are seen as a prerequisite for gaining and maintaining competitiveness. The research objective of this study is to examine the relationship between foreign direct investment (FDI) and economic growth in “new” European Union member countries using various unit root, cointegration, as well as causality tests. The paper employs annual data for FDI and gross domestic product (GDP) from 2002 to 2018 for the 13 most recent members of European Union (EU13): Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia. An estimated panel ARDL (PMG) model found evidence that there is a long-run equilibrium between the LogGDP, LogFDI and LogFDIP series, with the rate of adjustment back to equilibrium between 3.27% and 20.67%. In the case of the LogFDI series, long-run coefficients are highly statistically significant in all four models, varying between 0.0828 and 0.3019. These coefficients indicate that a 1% increase in LogFDI increases LogGDP between 0.0828% and 0.3019%. Results of a Dumitrescu-Hurlin panel causality test indicated that a relationship between the GDP growth rate and FDI growth rate is only indirect. Finally, only weak evidence was shown that FDI had a statistically significant impact on GDP in the EU13 countries over the period 2002-2018. This report of findings contributes to the literature concerning FDI and economic growth, namely regarding the current understanding of the relationship between these two factors.

Geopolitical risk, economic growth, economic uncertainty and international inbound tourism: an Indian Illustration

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sudeshna Ghosh
Keyword(s):  
Economic Growth ◽  
Economic Policy ◽  
Trade Openness ◽  
Policy Uncertainty ◽  
Tourism Demand ◽  
Content Type ◽  
Economic Policy Uncertainty ◽  
Long Run ◽  
Geopolitical Risks

Purpose This paper aims to consider the role of geopolitical risk in explaining tourism demand in India, a major tourist destination of the Asian region. Furthermore, the study also considers how in addition to geopolitical risk, economic policy uncertainty, economic growth, exchange rate, inflation and trade openness impact tourism demand. Design/methodology/approach The Bayer and Hanck (2013) method of cointegration is applied to explore the relationship between geopolitical risk and tourism demand. Furthermore, the study has also used the auto distributed lag model to determine whether there is a long-run cointegrating association between tourism demand, geopolitical risk, economic policy uncertainty, economic growth, exchange rate and trade openness. Finally, the vector error correction model confirms the direction of causality across the set of the major variables. Findings This paper finds that geopolitical risk adversely impacts inbound international travel to India. This study also obtains the consistency of the results across different estimation techniques controlling for important macro variables. The Granger causality test confirms the unidirectional causality from geopolitical risk to tourism and further from economic uncertainty to tourism. The findings from the study confirm that geopolitical risks have long-term repercussions on the tourism sector in India. The results indicate that there is an urgent need to develop a pre-crisis management plan to protect the aura of Indian tourism. The tourism business houses should develop skilful marketing strategies in the post-crisis to boost the confidence of the tourists. Research limitations/implications This paper provides valuable practical implications to tourism business houses. The tourism business houses can explore geopolitical risk measure and economic policy uncertainty measure to analyse the demand for international tourism in India. Further, the major stakeholders can establish platforms to help tourists to overcome the fear associated with geopolitical risk. Originality/value This study is the first of its kind to explore the geopolitical risks and their long-run consequences in the context of tourism in India. The study puts emphasis on the role of national policy to maintain peace otherwise it would be detrimental to tourism.

From Main Street to Wall Street

2021 ◽  
Author(s):  
Jesper Rangvid
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Business Cycle ◽  
Financial Markets ◽  
Stock Returns ◽  
Economic Activity ◽  
Wall Street ◽  
Business Cycle Fluctuations ◽  
Main Street ◽  
Long Run

From Main Street to Wall Street examines the relation between the economy and the stock market. It discusses the academic theories and empirical facts, and guides readers through the fascinating interaction between economic activity and financial markets. Itexamines what causes long-run economic growth and shorter-term business-cycle fluctuations and analyses their impact on stock markets. From Main Street to Wall Street also discusses how investors can use knowledge of economic activity and financial markets to formulate expectations to future stock returns. The book relies on data, and figures and tables illustrate arguments and theories in intuitive ways.In the end, From Main Street to Wall Street helps academic scholars and practitioners navigate financial markets by understanding the economy.

Introduction

2021 ◽  
pp. 1-6
Author(s):  
Jesper Rangvid
Keyword(s):  
Economic Growth ◽  
Business Cycle ◽  
Stock Returns ◽  
Economic Activity ◽  
Final Part ◽  
Stylized Facts ◽  
Long Run ◽  
Key Concepts ◽  
The Business Cycle

Chapter 1 contains an overview of the book. Part I introduces key concepts, definitions, and stylized facts regarding long–run economic growth and stock returns.Part II analyses the relation between economic growth and stock returns in the long run. Part III examines the shorter-horizon relation between economic growth and stock returns: the relation over the business cycle. Part IV explains how to make reasonable projections for economic activity, both for the short and the long run. Part V deals with expected future stock returns. The final part, a short one including one chapter only, explains how one can use the insights from the book when making investments.

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