scholarly journals Real Exchange Rate Misalignment and Economic Growth: The Case of Trinidad and Tobago

Economies ◽  
2018 ◽  
Vol 6 (4) ◽  
pp. 52 ◽  
Author(s):  
Daren Conrad ◽  
Jaymieon Jagessar
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Trinidad And Tobago ◽  
Manufacturing Sector ◽  
Empirical Studies ◽  
Government Expenditure ◽  
Long Term Effects ◽  
Significant Evidence ◽  
Exchange Rate Movements ◽  
The Impact

Empirical studies outline developing countries’ experience economic growth through an undervalued exchange rate and that exchange rate overvaluations have negative long term effects on economic growth. This paper examined the impact of exchange rate movements as well as exchange rate misalignments on economic growth for the Trinidad and Tobago economy over the period 1960 to 2016. We find statistically significant evidence that both exchange rate appreciation and misalignments impact negatively on economic growth in the T&T economy. Drilling deeper, we find interestingly that there exist no non-linear effects of exchange rate misalignments on growth. Specifically, we find statistically significant evidence that both overvaluations and under valuations hamper economic growth in the Trinidad and Tobago economy. We attribute this to T&T’s small and underdeveloped manufacturing sector that tends to be overlooked on account of its energy resources, in addition to the fact that its manufacturing sector is highly import oriented. A major policy recommendation would be for the critical reassessment of the rules governing the Heritage and Stabilization Fund (HSF), as government expenditure was allowed to follow energy revenues due to its current limitations.

scholarly journals Real Exchange Rate Misalignment and Economic Growth: The Case of Trinidad and Tobago

2018 ◽  
Author(s):  
Daren Conrad ◽  
Jaymieon Jagessar
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Trinidad And Tobago ◽  
Manufacturing Sector ◽  
Government Expenditure ◽  
Long Term Effects ◽  
Significant Evidence ◽  
Exchange Rate Movements ◽  
Exchange Rate Misalignment ◽  
The Impact

Conventional economic theory outlines that developing countries experience economic growth through an undervalued exchange rate and that exchange rate overvaluations has negative long term effects on economic growth. This paper examined the impact of exchange rate movements as well as exchange rate misalignments on economic growth for the Trinidad and Tobago economy over the period 1960 to 2016. We find statistically significant evidence that both exchange rate appreciation and misalignments impact negatively on economic growth in the T&T economy. Drilling deeper we find interestingly that there exist no non-linear effects of exchange rate misalignments on growth. Specifically we find statistically significant evidence that both overvaluations and undervaluations hamper economic growth in the Trinidad and Tobago economy. We attribute this to T&T’s small and underdeveloped manufacturing sector that tends to be overlooked on account of its energy resources, in addition to the fact that its manufacturing sector is highly import oriented. A major policy recommendation would be for the critical reassessment of the rules governing the HSF, as government expenditure was allowed to follow energy revenues due to its current limitations.

scholarly journals Impact of Exchange Rate Management on the Nigerian Economic Growth: Empirical Validation

2019 ◽  
Vol 1 (2) ◽  
pp. 28-35
Author(s):  
Friday Osaru Ovenseri Ogbomo ◽  
Precious Imuwahen Ajoonu
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Inflation Rate ◽  
Government Expenditure ◽  
Least Square ◽  
Ordinary Least Square ◽  
Exchange Rate Management ◽  
Long Run ◽  
Short Run ◽  
The Impact

This paper examined the impact of Exchange Rate Management on economic growth in Nigeria between 1980 and 2015. The study was set to gauge how the management of exchange rate in Nigeria has impacted the economy. The study employed the Ordinary Least Square (OLS) method in its analysis. Co-integration and Error Correction Techniques were used to establish the Short-run and Long-run relationships between economic growth and other relevant economic indicators. The result revealed that exchange rate management proxy by various exchange rates regimes in Nigeria was not germane to economic growth. Rather, government expenditure, inflation rate, money supply and foreign direct investment significantly impact on economic growth in Nigeria. It is against this backdrop that the Nigerian economy must diversify her export base to create room for more inflow of foreign exchange.  

scholarly journals ANALISIS DAMPAK SEKTOR INDUSTRI MANUFAKTUR, KEMISKINAN DAN BELANJA PEMERINTAH BIDANG LINGKUNGAN TERHADAP KUALITAS AIR DI INDONESIA

2020 ◽  
Vol 4 (2) ◽  
Author(s):  
Azanul Akbar Lubis
Keyword(s):  
Economic Growth ◽  
Water Quality ◽  
Negative Impact ◽  
Manufacturing Sector ◽  
Government Expenditure ◽  
Well Being ◽  
Industrial Sector ◽  
Regional Budget ◽  
The Impact ◽  
Positive Effect

Manufacturing sector is one of the sectors that contribute to economic growth in Indonesia. Results of these contributions is the changing structure of the Indonesian economy from agriculture to the industrial sector. And poverty in Indonesia which is one indicator of well‐being in an area tend to be in 2000 to 2010 has a pattern that tends to decline, although not very significant. Of 2 (two) variables, namely the Manufacturing Sector and Poverty, the author tries to determine the impact of variables on water quality in Indonesia, by adding variable Expenditures Environmental Affairs as variables that also impact the water quality in Indonesia. Manufacturing Sector GDP, the number of poor, Regional Budget (APBD) Environmental Field, each is used as a proxy for the manufacturing sector, poverty and Environment Sector Government expenditure. The data is compiled based on 28 provinces in Indonesia in 2009, 2010 and 2011. The results obtained showed that the industrial sector and poverty have a negative impact on water quality while Government Expenditure Environment Sector positive effect on water quality in Indonesia.

scholarly journals Exchange Rate Targeting Versus Inflation Targeting: Empirical Analysis of the Impact on Employment and Economic Growth

2020 ◽  
Vol 9 (2) ◽  
pp. 67-85
Author(s):  
Borivoje Krušković
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Least Squares ◽  
Inflation Targeting ◽  
Empirical Studies ◽  
Exchange Rate Policy ◽  
Exchange Rate Targeting ◽  
Stepwise Method ◽  
Rate Policy ◽  
The Impact

AbstractThis paper analyses the effects of two alternative monetary strategies (exchange rate targeting and inflation targeting) on economic growth and employment. On the panel of 18 countries for the period from 1996 to 2013, I tested the hypothesis that countries in exchange rate targeting have a higher rate of GDP growth and lower inflation rate. In order to test the impact of exchange rate policy on economic growth and prices, I applied dynamic panel two stepwise method of least squares (2SLS method) and they were evaluated by two independent regression equation. In order to allow the comparison of results related to exchange rate targeting, the effects of the introduction of inflation targeting in the unemployment rate were also estimated using the panel method two stepwise least squares (2SLS method). Results of empirical studies show that countries with inflation targeting have a lower rate of economic growth and higher unemployment.

scholarly journals Volatility Exchange Rate and Economic Growth: Insight from ASEAN Member Countries

2021 ◽  
Vol 68 (4) ◽  
pp. 495-507
Author(s):  
Gatot Nazir Ahmad ◽  
Haryo Kuncoro ◽  
Harmuzan Tazril ◽  
Dicky Iranto
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Sample Selection ◽  
Exchange Rate Volatility ◽  
Financial Report ◽  
Asean Member ◽  
Exchange Rate Movements ◽  
Primary Focus ◽  
Exchange Rate Changes ◽  
The Impact

This study aims to determine the effect of exchange rate volatility on economic growth in the ASEAN member countries (Indonesia, Thailand, Vietnam, and Cambodia) through investment. Based on the previous studies, the researcher focuses on developing the initial research analysis because it can control different company levels' characteristics and then determine the impact of exchange rate changes on economic growth mediated by investment. There is a limited analysis of whether exchange rate movements encourage overall investment in this study's particular direction. The author's primary focus is whether the export or import channels or both play an essential role in determining a company's investment. This study's population is in ASEAN member countries that have been published by the World Bank (https://www.worldbank.org/) and continue to exist during the period 1998-2019. The sample selection in this study used a purposive sampling method. Some of the ratio data were available in the financial report summary. The analysis method used in the study is the path analysis.

scholarly journals The Impact of Macroeconomic Factors on Manufacturing Sector Value Added in Ethiopia: An Application of Bounds Testing Approach to Cointegration

2020 ◽  
Vol 23 (1) ◽  
Author(s):  
Dagim Tadesse Bekele ◽  
Meskerem Teka Haile
Keyword(s):  
Exchange Rate ◽  
Time Series Data ◽  
Manufacturing Sector ◽  
Government Expenditure ◽  
Value Added ◽  
Series Data ◽  
Macroeconomic Variables ◽  
Long Run ◽  
The Impact ◽  
Bound Test

The role of the manufacturing sector for the economic growth and structural change is very low in Ethiopia and performing less compering with that of the other sectors in the economy. So, this research tried to look at how different macroeconomic variables affect the manufacturing sector value added by using annual time series data from 1982 to 2018 estimated by Autoregressive-Distributed Lag (ARDL). The result from the Bound test shows manufacturing sector value added has a long-run relationship with macroeconomic variables in the model. In the long-run, general inflation rate, exchange rate, and trade openness have a significant negative effect on the manufacturing sector value-added. In contrast, general government expenditure has a significant positive effect. Also, the Error Correction model shows an adjustment towards the long-run equilibrium of the manufacturing sector value-added. So, the government has to control the general inflation level, promote demand for domestic manufacturing products and competitiveness of domestic firms, and strengthen the backward link of the sector to decrease its import-input dependency to reduce the effect of exchange rate depressions. Lastly, effective and efficient government expenditure will have to be used to increase the manufacturing sector value-added.

scholarly journals The Impact of Natural Resource Rent on Economic Growth of Ghana

2020 ◽  
pp. 1-17
Author(s):  
Opoku Adabor ◽  
Emmanuel Buabeng ◽  
Godred Annobil-Yawson
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Significant Relationship ◽  
Oil And Gas ◽  
Negative Impact ◽  
Positive Impact ◽  
Government Expenditure ◽  
Resource Rent ◽  
The Government ◽  
The Impact

This study examines the effect of oil and gas resource rent on economic growth of Ghana for the period of 2007 to 2019. The study uses the bounds test approach to cointegration within the framework of autoregressive distributed lags model as the estimation strategy. The results from the study revealed that oil resource rent had a negative and significant relationship with economic growth of Ghana. However, gas resource rent had a positive impact on economic growth of Ghana. Furthermore, the study also found that foreign direct investment and exchange rate had significant positive relation with economic growth of Ghana respectively. For government expenditure, it exerts a negative impact on economic growth of Ghana.  Based on the negative and significant relationship with oil resource rent and economic growth of Ghana, it is recommended that the government should reduce taxes on oil industries to help increase the production of oil and gas in Ghana. Furthermore, the study recommends Government and private partnership to ensure effective management of exchange rate fluctuations in Ghana.

scholarly journals PUBLIC INVESTMENTS INCENTIVE FACTORS OF ECONOMIC GROWTH - CASE STUDY OF REPUBLIC OF NORTH MACEDONIA

2019 ◽  
Vol 31 (1) ◽  
pp. 187-192
Author(s):  
Florije Miftari ◽  
Besime Ziberi
Keyword(s):  
Economic Growth ◽  
Full Employment ◽  
Public Investment ◽  
Empirical Studies ◽  
Basic Function ◽  
Public Expenditures ◽  
Long Term Effects ◽  
Public Investments ◽  
The Impact

The basic function of public finances is economic stability that implies the use of public finance instruments in order to stabilize economic cycles to achieve full employment, overall price stability, achieving an adequate rate of economic growth, a stable rate economic development.Governments to contribute to economic balances, job creation, and productivity growth tend to boost productive public spending by undertaking long-term activities in the sphere of public investment, namely public, health and education infrastructure, as well as in the sphere of research and development. Both theoretical and empirical studies conclude that public investment impacts on economic growth, represent an instrument of low growth, but their increasing effect is influenced by various factors such as economic circumstances, level of development the quality of governance, the efficient management of investment projects, the sectors in which it is invested, the capital fund, etc.The purpose of this paper is to research the short-term and long-term effects of public investments in the Republic of Northe Macedonia in economic growth. The analysis takes into account the data on the structure of public investment, gross domestic product for the time period 2008-2017. Using the multiple regression analysis OLS, we conclude that in the long run the impact of public investment on economic growth is symbolic given that a very small percentage of public expenditures for public infrastructure investments although Macedonia is characterized by a low capital public fund.

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