scholarly journals Is Inflation Regressive or Progressive? Long Run & Short Run Evidence from Pakistan

2010 ◽  
Author(s):  
Muhammad Shahbaz ◽  
Abu N. M. Wahid ◽  
Rukhsana Kalim
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
Time Series Data ◽  
Least Square ◽  
Series Data ◽  
Advanced Technique ◽  
Ordinary Least Square ◽  
Long Run ◽  
Non Linear ◽  
Short Run

The present paper investigates an answer to a key question “is inflation regressive or progressive?” by utilizing time series data from 1971 up to 2005 with reference to Pakistan. The main focus of the study is on the inflation-inequality puzzle but other control variables are also included in the model that affect income distribution. We have utilized the most advanced technique FMOLS (Fully-Modified Ordinary Least Square) for long run and ECM (Error Correction Model) for short run dynamics. Our findings suggest that inflation is progressive in the case of Pakistan but with low magnitude. There is also a prevalence of a U-shaped relationship between inflation and income inequality in non-linear or non-monotonic phenomenon, but it is insignificant. Per capita income deteriorates income distribution, and seems to provide gains to non-poor individuals in the economy. Remittances as share of GDP, and human capital, also appear to increase income inequality in both periods but large size of the government seems to worsen income distribution in the long run. International trade and income inequality are positively correlated that confirms the existence of Leontief paradox in Pakistan not only in short run, but also in long run. Financial development declines income inequality insignificantly. Inverted U-shaped curve (Lafer-Curve) indicates an association of trade and income inequality in non-linear fashion insignificantly. This effort provides some new insights for policy makers and development planners in Pakistan.   Keywords: Inflation; inequality; fully modifed ordinary least square; Pakistan.  

scholarly journals Asymmetrical Linkages between Foreign Exchange and Stock Markets: Empirical Evidence through Linear and Non-Linear ARDL

2018 ◽  
Vol 11 (3) ◽  
pp. 51 ◽  
Author(s):  
Rabia Luqman ◽  
Rehana Kouser
Keyword(s):  
Time Series Data ◽  
Equity Markets ◽  
Series Data ◽  
Policy Makers ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Non Linear ◽  
Short Run ◽  
Daily Time

The symmetrical relationship between currency and equity markets has gained much attention among academicians and policy makers in the recent era. Many studies conducted on this relationship have concluded that there is short-run relationship between these variables and found less evidence about a long-run relationship. Moreover, all previous studies supposed the linear or symmetrical relationship between these variables. In this study, we use daily time series data from G8+5 countries and Pakistan for 2000–2016 and apply linear and non-linear autoregressive distributed lag (ARDL) to check the symmetrical and asymmetrical relationship between currency and equity markets. Results have shown that there are asymmetrical linkages between the currency and equity markets.

scholarly journals Educational Gender Gap, Economic Growth and Income Distribution: An Empirical Study of the Interrelationship in Cameroon

2017 ◽  
Vol 9 (3) ◽  
pp. 168
Author(s):  
Dobdinga C. Fonchamnyo ◽  
Nubonyin Hilda Fokong
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Income Distribution ◽  
Gender Gap ◽  
Time Series Data ◽  
Labour Force ◽  
Trade Openness ◽  
Least Square ◽  
Series Data ◽  
Theil Index

This study aimed at investigating the interrelationship existing between educational gender gap, economic growth and income distribution in Cameroon using time series data from 1970 to 2014 obtained from the World Bank Development indicators and University of Texas inequality project. For estimation, the three stage least square regression technique was employed to estimate the parameters of the system of equations. The econometrics results showed that, educational gender gap had a positive and significant effect on economic growth, while increase in income inequality deters growth in Cameroon. The results also revealed that the theil index of income inequality negatively and significantly affect the educational gender gap, while the proportion of female teachers in the labour force and trade openness had a positive influence on the educational gender gap. Based on the findings, it is recommended that policymakers should focus on socio-economic policies apt to reduce educational gender gap and income inequality and at promoting economic growth.

The Relationship Between Inflation and Unemployment in Namibia Within the Framework of the Phillips Curve

2021 ◽  
Vol 7 (5) ◽  
pp. 7-16
Author(s):  
Johanna Pangeiko Nautwima ◽  
Asa Romeo Asa
Keyword(s):  
Causal Relationship ◽  
Phillips Curve ◽  
Time Series Data ◽  
Policy Formulation ◽  
Least Square ◽  
Series Data ◽  
Causality Test ◽  
Long Run ◽  
Short Run ◽  
The Relationship

This study intended to empirically validate the applicability of the Phillips Curve in Namibia since independence, using semi-annual time series data, and taking into account the periods of the annus horribilis of the global financial crises and the Coronavirus Disease pandemic. It further sought to examine the nature of the relationship between inflation and unemployment to determine whether it is short-run or long-run and establish the causal relationship between the variables using various econometric analyses. The unit root tests indicate that the variables were stationary in their level forms, implying the absence of the long-run relationship. Hence, the Ordinary Least Square (OLS) model was performed to measure the short-run relationship between the variables. Results from the OLS analysis reveal a bidirectional nexus between inflation and unemployment, validating the presence of the Phillips Curve in the Namibian economy. These results correspond to the findings that incorporated the periods of economic shocks; thus, adjudging the critics of the Philips Curve regarding the consideration of economic shockwaves to be nonsensical in the Namibian economy. Finally, Granger causality test was conducted to establish the causal relationship between the variables, and results found inflation and unemployment to be unrelated. Based on these findings, the study recommends policymakers to adopt a policy mix, skewed to reducing unemployment predominately among the youth since the issues cannot be addressed simultaneously. Lastly, the study suggests future investigations to assess panel analyses on the phenomenon concerning developing countries, particularly those in the same region. It also recommends a significant focus on the determinants of inflation and unemployment since the variables were found to be independent of each other. This will give accurate directives to policymakers in an attempt to address the matter in terms of policy formulation and assimilation when they understand where the issue is deriving from.

scholarly journals Inter-Sectorial Linkage of Economic Sectors and Their Contribution to Economic Growth: A Time Series Evidence from Ethiopia and China

2018 ◽  
Vol 5 (1) ◽  
pp. 25-32
Author(s):  
Abrham Tezera Gessesse ◽  
Zheng Xungang ◽  
He Ge
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Time Series Data ◽  
Least Square ◽  
Series Data ◽  
Economic Sectors ◽  
Long Run ◽  
Johansen Cointegration ◽  
Short Run ◽  
Johansen Cointegration Test

Purpose: The aim of this paper is to investigate the inter-sectorial linkage of economic sectors and their contribution to the economic growth using time series data from 1978-2014 and 1992-2014. Design/methodology/approach: This study employed a Johansen cointegration test and Ordinary Least Square (OLS) model. Findings: The Johansen cointegration and multiple regression results indicate that all economic sectors have strong, positive and significant long-run and short-run relationship with economic growth during the study period in both countries. The result revealed that MNF giant is an engine for Chinese economic growth while agriculture took the lion-share for Ethiopian economy. The MNF has bi-directional Granger cause with economic growth, agriculture and SRV for China, while GDP and AGR are the only bi-directional Granger causes variables for Ethiopia. Implications: Therefore, from a policy perspective, Ethiopian policymakers need to formulate agro-processing industries to ensure the transformation of the AGR to the MNF as well as maintain inter-sectorial linkage and sustain the country’s economic growth.  

scholarly journals Monetary Policy and Financial Performance of Deposit Money Banks in Nigeria

2020 ◽  
Vol 16 (11) ◽  
pp. 123
Author(s):  
Yimka S. A. Alalade ◽  
Ezekiel Oseni ◽  
Olusegun A. Adekunle
Keyword(s):  
Monetary Policy ◽  
Financial Performance ◽  
Time Series Data ◽  
Least Square ◽  
Series Data ◽  
Net Worth ◽  
Long Run ◽  
Lending Rate ◽  
Short Run ◽  
Reserve Ratio

This study considered the influence of monetary policy on the financial performance of deposit money banks in Nigeria. The study engaged the use of a time series data for 35 years, from the period 1984 to 2018; all deposit money banks as captured by the Central Bank of Nigeria Statistical Bulletin (2015) were considered. The effect of liquidity ratio, lending rate, loan to deposit ratio and cash reserve ratio were examined on the financial performance of deposit money banks measured by their net worth and total credits. The data was analyzed using descriptive and inferential statistics. Based on the result of stationarity test, the ordinary least square method and the Autoregressive Distributed Lag method were employed. A short run model of net worth and long run model for both the log of net worth and the log of total credits were estimated. The results revealed that the mean of net worth and total credits are 5455.27 and 79608.63 respectively. In the long run, monetary policy variables including liquidity ratio, lending rate, loans to deposit ratio and cash reserve ratio had no significant effect on the log of net worth. However in the short run, variations in the liquidity ratio, loans to deposit ratio and the cash reserve ratio for previous years had significant effect on the log of net worth in the current year. When financial performance is measured as total credits, the liquidity ratio and loans to deposit ratio had positive significant effect in the long run. The cash reserve ratio had a negative significant effect in the long run. The log of lending rate was insignificant in both the long and short run. The study concluded that monetary policy significantly explains the financial performance of deposit money banks both in the short and long run.

Impact of exchange rate and oil price on the yield of sovereign bond and sukuk: Evidence from Malaysian capital market

2017 ◽  
Vol 5 (4) ◽  
pp. 27
Author(s):  
Huda Arshad ◽  
Ruhaini Muda ◽  
Ismah Osman
Keyword(s):  
Exchange Rate ◽  
Capital Market ◽  
Time Series Data ◽  
Oil Prices ◽  
Oil Price ◽  
Series Data ◽  
Sovereign Bond ◽  
Long Run ◽  
Short Run ◽  
The Impact

This study analyses the impact of exchange rate and oil prices on the yield of sovereign bond and sukuk for Malaysian capital market. This study aims to ascertain the effect of weakening Malaysian Ringgit and declining of crude oil price on the fixed income investors in the emerging capital market. This study utilises daily time series data of Malaysian exchange rate, oil price and the yield of Malaysian sovereign bond and sukuk from year 2006 until 2015. The findings show that the weakening of exchange rate and oil prices contribute different impacts in the short and long run. In the short run, the exchange rate and oil prices does not have a direct relation with the yield of sovereign bond and sukuk. However, in the long run, the result reveals that there is a significant relationship between exchange rate and oil prices on the yield of sovereign bond and sukuk. It is evident that only a unidirectional causality relation is present between exchange rate and oil price towards selected yield of Malaysian sovereign bond and sukuk. This study provides numerical and empirical insights on issues relating to capital market that supports public authorities and private institutions on their decision and policymaking process.

Fish Exports and Economic Growth: The Pakistan’s Experience

2019 ◽  
Vol 20 (2) ◽  
pp. 279-296 ◽  
Author(s):  
Syed Tehseen Jawaid ◽  
Mohammad Haris Siddiqui ◽  
Zeeshan Atiq ◽  
Usman Azhar
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Positive Impact ◽  
Impulse Response Function ◽  
Policy Implications ◽  
Sensitivity Analyses ◽  
Series Data ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

This study attempts to explore first time ever the relationship between fish exports and economic growth of Pakistan by employing annual time series data for the period 1974–2013. Autoregressive distributed lag and Johansen and Juselius cointegration results confirm the existence of a positive long-run relationship among the variables. Further, the error correction model reveals that no immediate or short-run relationship exists between fish exports and economic growth. Different sensitivity analyses indicate that initial results are robust. Rolling window analysis has been applied to identify the yearly behaviour of fish exports, and it remains negative from 1979 to 1982, 1984 to 1988, 1993 to 1999, 2004 and from 2010 to 2013, and it shows positive impact from 1989 to 1992, 2000 to 2003 and from 2005 to 2009. Furthermore, the variance decomposition method and impulse response function suggest the bidirectional causal relationship between fish exports and economic growth. The findings are beneficial for policymakers in the area of export planning. This study also provides some policy implications in the final section.

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.

Has the low level of economic growth spurred informal sector activities in Uganda? An empirical analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Stephen Esaku
Keyword(s):  
Economic Growth ◽  
Informal Sector ◽  
Shadow Economy ◽  
Time Series Data ◽  
Series Data ◽  
Content Type ◽  
Low Level ◽  
Revenue Collection ◽  
Long Run ◽  
Short Run

PurposeIn this paper, the authors examine how economic growth shapes the shadow economy in the long and short run.Design/methodology/approachUsing annual time series data from Uganda, drawn from various data sources, covering the period from 1991 to 2017, the authors apply the ARDL modeling approach to cointegration.FindingsThis paper finds that an increase in economic growth significantly reduces the size of the shadow economy, in both the long and short run, all else equal. However, the long-run relationship between the shadow economy and growth is non-linear. The results suggest that the rise of the shadow economy could partially be attributed to the slow and sluggish rate of economic growth.Practical implicationsThese findings imply that addressing informality requires addressing underlying factors of underdevelopment since improvements in economic growth also translate into a reduction in the size of the shadow economy in the short and long run.Originality/valueThese findings reveal that the low level of economic growth is an issue because it spurs informal sector activities in the short run. However, as the economy improves, it becomes an incentive for individuals to operate in the informal sector. Additionally, tackling shadow activities in the short run could help improve tax revenue collection.

scholarly journals Import Flows of Bangladesh: Gravity Model Approach under Panel Data Methodology

2012 ◽  
Vol 60 (2) ◽  
pp. 153-157 ◽  
Author(s):  
Mili Roy ◽  
Md. Israt Rayhan
Keyword(s):  
Panel Data ◽  
Gravity Model ◽  
Cross Section ◽  
Time Series Data ◽  
Random Effect ◽  
Least Square ◽  
Series Data ◽  
Ordinary Least Square ◽  
Extended Gravity ◽  
Trading Partners

In counterpoint to export growth, Bangladesh import growth has remained much less strong, despite impressive progress in import liberalization. This study gives an overview of different methodologies related to gravity model analysis in Bangladesh’s import flow. A pooled cross section and time series data were analyzed to incorporate the country specific heterogeneity in country pair trading partners. The import flows are justified by the basic gravity model since Bangladesh’s imports are positively significant by the economy size and inversely related to trade barrier. Accordingly, we have analyzed pooled ordinary least square, fixed effect, random effect. This study also explores extended gravity model using several variables in the light of gravity model panel data approach. Bangladesh’s import is determined by the home and foreign country’s gross domestic product and exchange rate. In addition, Cross section results show that regional trade arrangement which is South Asian Association for Regional Co-operation and border are significant for Bangladesh’s importimplies that Bangladesh should import more from intra regional country and also should import from India.DOI: http://dx.doi.org/10.3329/dujs.v60i2.11485 Dhaka Univ. J. Sci. 60(2): 153-157, 2012 (July)  

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