scholarly journals Analysis of Wavelet Coherence: Service Sector Index and Economic Growth in an Emerging Market

2019 ◽  
Vol 11 (23) ◽  
pp. 6684 ◽  
Author(s):  
Ayhan Orhan ◽  
Derviş Kirikkaleli ◽  
Fatih Ayhan
Keyword(s):  
Economic Growth ◽  
Frequency Domain ◽  
Time Domain ◽  
Service Sector ◽  
Emerging Market ◽  
Causal Link ◽  
Wavelet Coherence ◽  
Long Run ◽  
Causality Tests ◽  
Short Run

The present study aims to shed some light on the causal link between the Service Sector Index in the Turkish stock market and economic growth using a wavelet coherence approach. Thus, the present study determines whether the Service Sector Index leads to economic growth in Turkey and/or vice versa. Based on our aim, we use the wavelet coherence approach, which allows us to capture long-run and short-run causal linkages between the Service Sector Index and economic growth in Turkey, since the approach combines both time domain causality and frequency domain causality tests. The findings from wavelet coherence reveal that there is one-way causality running from the Service Sector Index to economic growth in Turkey at different frequencies and different periods between 1997 and 2017.

scholarly journals Nexus Among Tourism, Environmental Degradation, Inward FDI and Economic Growth: Fresh Evidence from ASEAN Countries

2020 ◽  
Author(s):  
Muhammad Azam ◽  
Sameena Noor ◽  
Muhammad Atif Nawaz
Keyword(s):  
Economic Growth ◽  
Environmental Degradation ◽  
Causal Link ◽  
Positive Influence ◽  
Jel Classification ◽  
Pooled Mean Group ◽  
Long Run ◽  
Short Run ◽  
Asean Countries ◽  
Tourism Arrivals

Abstract This study aims to investigate the linkage among tourism, foreign direct investment, environmental degradation by CO2 emissions and economic growth in five countries from Association of Southeast Asian Nations (ASEAN) over 1995–2017. The outcomes of pooled mean group (PMG) estimator reveal that FDI and international tourism arrivals have a significantly positive influence on economic growth both in the short-run and the long-run. The association between growth and CO2 emissions is found negative and significant. The Granger causality result reveals that there is bidirectional causality between FDI and growth, tourism and growth and FDI and tourism. A unidirectional causal link is found between CO2 emissions and growth, tourism and population and population and CO2 emissions. These findings suggest enhance more inward FDI, control environmental pollution, but also necessary to attract more tourists towards these countries, which in turn, generate revenue and boost up economic growth and development.JEL Classification Codes: F21; O13; O47; Z32

Electricity Consumption–Economic Growth Nexus: Evidence from ARDL Bound Testing Approach in the Tunisian Context

2020 ◽  
pp. 097215092092543 ◽  
Author(s):  
Zouheir Mighri ◽  
Hanen Ragoubi
Keyword(s):  
Economic Growth ◽  
Electricity Consumption ◽  
Bounds Testing ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Causality Tests ◽  
Short Run ◽  
Testing Approach ◽  
Causal Nexus

This article investigates the causal nexus between electricity consumption and economic growth in Tunisia for the period 1971–2013 by using autoregressive distributed lag (ARDL) bounds testing approach of cointegration and Granger causality tests. The empirical findings indicate the existence of a long-term relationship between electricity consumption and economic growth. Besides, they support the conservation hypothesis in the long run, while they confirm the growth hypothesis in the short run.

scholarly journals Electricity Consumption and Economic Growth in Nigeria: A Sectoral Analysis

2019 ◽  
Vol 5 (1) ◽  
pp. 45 ◽  
Author(s):  
Akomolafe Kehinde John
Keyword(s):  
Economic Growth ◽  
Service Sector ◽  
Manufacturing Sector ◽  
Electricity Consumption ◽  
Vector Error Correction ◽  
Agriculture Sector ◽  
Long Run ◽  
Sectorial Analysis ◽  
Short Run ◽  
Electricity Conservation

This paper examines the causality between electricity consumption and economic growth in Nigeria, with a focus on sectorial analysis. The sectors considered are manufacturing sector, agriculture sector, and the service sector. The study covers the periods from 1981 to 2014. The study was done in a vector error correction model (VECM). The results show that the causality run from  manufacturing sector to electricity consumption in long run, but a bidirectional causality in the short run, from electricity consumption to service sector output  in the long run, and  from electricity consumption to service sector output in long run. There is no short run causality between electricity consumption and service sector and agricultural sectors outputs. The paper concludes with the recommendation that government should be careful in implementing electricity conservation policy

scholarly journals Investigating the Causal Relationships among Carbon Emissions, Economic Growth, and Life Expectancy in Turkey: Evidence from Time and Frequency Domain Causality Techniques

2021 ◽  
Vol 13 (5) ◽  
pp. 2924
Author(s):  
Husam Rjoub ◽  
Jamiu Adetola Odugbesan ◽  
Tomiwa Sunday Adebayo ◽  
Wing-Keung Wong
Keyword(s):  
Economic Growth ◽  
Life Expectancy ◽  
Frequency Domain ◽  
Causal Relationship ◽  
Carbon Emissions ◽  
Time Series Data ◽  
Wavelet Coherence ◽  
Series Data ◽  
Causal Relationships ◽  
Long Run

It is not a gainsaying that challenges to both healthy living and the environment are the result of deteriorating environmental quality with the attendant effect on environmental sustainability. To provide a solution to the issue, our study uses long time-series data from 1960 to 2018, and employs an overlapping generational model, the Bayer–Hanck cointegration test, wavelet coherence, Fourier Toda–Yamamoto, and Breitung–Candelon frequency-domain spectral causality tests to investigate the causal relationships among carbon emissions (CO2), economic growth (GDP), and life expectancy (LE) in Turkey. Different from the literature, we find a positive co-movement between life expectancy and CO2 and a positive correlation between LE and GDP at different scales; CO2 has a causal relationship with LE and a bidirectional causal relationship between LE and GDP, as well as short, medium, and long-run causal relationships with LE; GDP has medium and long-run causal relationships with LE, and LE has short, medium, and long-run causal relationships with GDP. Our findings guide policymakers on their policy decision-making that will address the energy consumption, environmental degradation, human health, environmental hazards, and allocation to science and technology in Turkey with the aim of ensuring overall sustainable development.

scholarly journals Frequency Domain Causality Relationship Analysis Between Poverty, Economic Growth and Financial Development in Algeria

2019 ◽  
Vol 12 (2) ◽  
pp. 93-111
Author(s):  
Ayad Hicham ◽  
Belmokaddem Mostefa ◽  
Sari Hassoun Salah Eddin
Keyword(s):  
Economic Growth ◽  
Frequency Domain ◽  
Financial Development ◽  
Poverty Reduction ◽  
Financial Sector ◽  
Real Sector ◽  
Relationship Analysis ◽  
Long Run ◽  
Short Run ◽  
The Time Domain

AbstractSince the previous periods, poverty reduction has been a big concern for many countries especially in developing countries like Algeria; in this paper, we shall explore the causal relationship between poverty reduction, economic growth and financial development in Algeria during the period of 1970-2017, the aim of this research is to answer the question which sector causes the poverty reduction: real sector or financial sector? Therefore, we employed the modern frequency domain causality presented by Breitung and Candelon (2006) with a comparison with the time domain causality under Lutkepohl (2006) procedure, the results suggest that there is unidirectional causality running from the real sector (economic growth) to poverty rates in the short and long run terms, also, we found that there is an unidirectional causality running from the financial sector to poverty rates only in the long run term, while another causality running from poverty rates to the financial sector but in the short run term. This article aims at contributing to enlarge the literature review by utilizing the frequency domain causality in the field of poverty studies because of its effectiveness to test the causalities in different frequencies.

The Importance of Railroad Freight Transportation and Its Correlation to Economic Growth

2021 ◽  
Vol 11 (2) ◽  
pp. 1-13
Author(s):  
Volkan Köse ◽  
Dilek Temiz Dinç ◽  
Aytaç Gökmen
Keyword(s):  
Economic Growth ◽  
Econometric Model ◽  
Freight Transportation ◽  
Econometric Analysis ◽  
Causality Test ◽  
Long Run ◽  
Causality Tests ◽  
Short Run ◽  
Causality Relationship ◽  
Railroad Freight

In this study, the railroad freight transportation and economic growth relationship in Turkey was examined using the econometric analysis for the period of 1984-2017. As a result of the econometric analysis, it was found that there is no causal relationship between railroad freight transportation and economic growth in the long run, while there is a causality relationship from railroad freight transportation to economic growth in the short run. In addition to causality tests, an econometric model was created using stationary series, and the OLS method was applied for this model. According to this estimation result, an increase in railroad freight transportation increases economic growth. When this result obtained from the OLS estimation and the findings obtained from the Granger causality test are evaluated altogether, it can be stated that an increase in railroad freight transportation accelerates economic growth in the short run in Turkey.

scholarly journals Time–frequency dependency of financial risk and economic risk: evidence from Greece

2019 ◽  
Vol 8 (1) ◽  
Author(s):  
Dervis Kirikkaleli
Keyword(s):  
Financial Risk ◽  
Causal Link ◽  
Wavelet Coherence ◽  
Economic Risk ◽  
Frequency Dependency ◽  
Time Frequency ◽  
Long Run ◽  
Short Run ◽  
The One ◽  
Of Greece

Abstract This study aims to shed some light on the one of the most popular phenomena in the economics and finance literature—nexus between economic growth and financial development—for the case of Greece over 1990Q1 to 2018Q4 within the framework of risk. In other words, this study investigates the causal link between financial risk and economic risk in Greece using wavelet coherence tests while answering the following questions: (i) does financial risk lead to economic risk in Greece and/or does economic risk lead to financial risk in Greece, and (ii) if so, why? The wavelet coherence approach allows the study to capture the long-run and short-run causal linkages among the time series variables since the approach combines time and frequency domain causalities. The findings from wavelet coherence supports the Schumpeter hypothesis since the findings proves that there is unidirectional causality from financial risk to economic risk in Greece (i) between 1995 and 1998; (ii) between 2003 and 2013; (iii) between 2013 and 2017 at different frequency levels. The findings clearly reveal how financial risk is important predictor for economic risk in Greece over the period of 1990–2018.

scholarly journals Detection of Lead-Lag Relationships Using Both Time Domain and Time-Frequency Domain; An Application to Wealth-To-Income Ratio

Economies ◽  
2019 ◽  
Vol 7 (2) ◽  
pp. 28 ◽  
Author(s):  
Angeliki Skoura
Keyword(s):  
Time Series ◽  
Time Domain ◽  
Wavelet Coherence ◽  
Economic Time Series ◽  
Time Frequency ◽  
Joint Application ◽  
Long Run ◽  
Income Ratio ◽  
Short Run ◽  
Economic Time

The objective of this paper is the joint application of two different methodological concepts for the detection of lead-lag relationships in economic time-series in order to investigate their consistency and their potential complementarity. The first methodology, a time domain analysis based on vector error correction model, provides evidence about the existence of long-run equilibrium of the time-series and the short-run lead-lag behaviors. The second methodology, a time-frequency concept based on the phase difference of the cross-wavelet coherence, analyzes the lead-lag relationships across various timescales and reveals the altering of leadership over time. The two methods are applied to time-series of wealth-to-income ratio of four developed countries over the period 1970–2010 and analyze the lead-lag relationships of the countries in the long-run and in the short-run. The results show that the two methods are consistent in their major long-run findings, however, they reveal different aspects regarding the short-run dynamics of the lead-lag relationships. Furthermore, the results suggest the complementarity of the two methodologies in the context of a complete framework for the analysis of the lead-lag relationships in non-stationary economic time-series.

scholarly journals Sustainability of Energy-Induced Growth Nexus in Brazil: Do Carbon Emissions and Urbanization Matter?

2021 ◽  
Vol 13 (8) ◽  
pp. 4371 ◽  
Author(s):  
Tomiwa Sunday Adebayo ◽  
Abraham Ayobamiji Awosusi ◽  
Jamiu Adetola Odugbesan ◽  
Gbenga Daniel Akinsola ◽  
Wing-Keung Wong ◽  
...  
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Co2 Emissions ◽  
Economic Performance ◽  
Trade Openness ◽  
Least Square ◽  
Wavelet Coherence ◽  
Gradual Shift ◽  
Long Run ◽  
Causality Tests

This study assesses the relationship between economic performance and environmental sustainability by taking into account the role of energy consumption, urbanization, and trade openness in Brazil by using data spanning from 1965 to 2019. The study is distinct from previously documented studies in literature in terms of scope for Brazil, where few entries have been recorded. The major objectives are to address the questions: (a) Is there a long-run connection between the variables under consideration? (b) Can CO2 emissions, trade openness, and energy consumption predict economic performance of Brazil? (c) What is the connection between economic growth and the independent variables at different frequencies and time-period? Furthermore, the study utilized dynamic ordinary least square (DOLS), fully modified ordinary least square (FMOLS), Maki Cointegration, and autoregressive distributed lag (ARDL) to capture the long-run association between the variables of interest. Also, we used the Wavelet coherence and Gradual-shift causality tests to capture the causal linkage between economic growth and the regressors. The advantage of the wavelet coherence test is that it can capture causal linkage between series at different frequencies and periods. The outcome of both Maki cointegration and ARDL bounds testing to cointegration affirms the presence of long-run interaction among the parameters of interest. Furthermore, the outcomes of the DOLS and FMOLS revealed that energy consumption, CO2 emissions, and urbanization exert positive impacts on economic growth in Brazil while there is no significant connection between trade openness and economic growth. Moreover, Gradual shift causality test outcomes disclosed that urbanization, trade openness, CO2 emissions and energy usage can predict the economic performance of Brazil. The outcomes of the wavelet coherence test give credence to the FMOLS, DOLS, and Gradual shift causality tests.

scholarly journals The Impact of Human Capital on Economic Growth in Ethiopia: Evidence from Time Series Analysis

2020 ◽  
Vol 1 (1) ◽  
pp. 51-73
Author(s):  
Mekoro Arega
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Secondary School ◽  
Skilled Workers ◽  
School Enrolment ◽  
Long Run ◽  
Causality Tests ◽  
Secondary School Enrolment ◽  
Short Run ◽  
The Impact

The general objective of the study was to analyze the impact of human capital development on economic growth in Ethiopia over the period 1974/5 -2018/9. The econometric models of Johnesan cointegration, VECM and causality tests were applied to analysis short-run and long-run impact of Human capital on Economic growth. The result of the error correction model shows that the model is adjusting at a relatively stable rate of 74.3% towards the long-run equilibrium. Furthermore, the result shows that human capital proxied of (primary and secondary school enrolments) and active labour force have a positive statistical significant long run and short-run effect on economic growth in Ethiopia. Such findings are consistent with the endogenous growth theories which argue that an improvement in human capital (skilled workers) improves productivity. In addition, results reveal that education expenditure and life expectancy at birth have a positive and statistically significant long-run effect on economic growth. However, the expenditure on health, secondary school enrolment and official development assistance are statically significant and have an unexpected negative impact on long-run economic growth. Furthermore, the short-run causality tests results reveal that public expenditure on education, primary school enrolment, secondary school enrolment and RGDP have unidirectional causal effects. Hence policymakers and/or the government give prioritize to create institutional capacity that increase school enrolment and strengthening the infrastructure or investment of educational and health institutions that produce quality of manpower to increase productivity.

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