scholarly journals Government Spending and Economic Growth: A Cointegration Analysis on Romania

2021 ◽  
Vol 13 (12) ◽  
pp. 6575
Author(s):  
Cristian C. Popescu ◽  
Laura Diaconu (Maxim)
Keyword(s):  
Economic Growth ◽  
Government Spending ◽  
Public Spending ◽  
National Income ◽  
Cointegration Analysis ◽  
Short Term ◽  
Causality Test ◽  
Long Term Effect ◽  
The One

The purpose of our study is to identify the nature of the link between government spending and economic growth, in order to test the two theories of Wagner and Keynes, in the case of Romania. On the one hand, Keynes argues that public spending is an important tool to stimulate growth. On the other hand, Wagner says that increased public spending is a result of economic growth. We analyzed the long-term dynamics of the two time series through Johansen’s cointegration approach and, in the short term, with the help of Granger’s causality test. The obtained results do not indicate the existence of long-term cointegration vectors, but they support the double causality relation in the short term. Therefore, not only does GDP represent a Granger cause for government spending but also vice versa. Our results validate the liberal criticism of the state’s involvement in supporting economies. As the critics of the monetarist school said, the effect of multiplying government spending on national income is short-term. The long-term effect appears under the action of inflationary macroeconomic bottlenecks.

scholarly journals Influence of Socioeconomic Determinants on Undernourishment in South Asia: A Panel Cointegration Analysis

Health Scope ◽  
2021 ◽  
Vol 10 (2) ◽  
Author(s):  
Md. Saiful Islam
Keyword(s):  
Economic Growth ◽  
South Asia ◽  
Adult Literacy ◽  
Personal Development ◽  
National Income ◽  
Panel Cointegration ◽  
Negative Association ◽  
Cointegration Analysis ◽  
Causality Test

Background: Undernourishment is a major public health challenge worldwide, with severe economic consequences. If occurs in the first years of life, it may cause long-lasting effect, particularly regarding personal development and economic growth of the country. Objectives: The current study aimed to investigate the influence of socioeconomic factors, particularly education and national income, on undernourishment in selected countries of South Asia. Methods: The annual panel data for 2001 to 2018 were analyzed using the vector error correction model (VECM) technique and the Toda-Yamamoto Granger causality test (TYGCT). Results: According to the results of the VECM, adult literacy has mixed effects on undernourishment in the short run, while in the long term, it is associated with significant improvements in undernourishment. There is a negative association between economic growth and undernourishment in the short term; while, it disappears in the long term. The TYGCT is designed to validate the findings of the VECM as well as to investigate their robustness. According to the findings of the TYGCT, adult literacy alone can both improve undernourishment and enhance economic growth. Conclusions: This study demonstrated a negative association between undernourishment and adult literacy rate in the long term; that is, higher literacy is associated with lower rates of undernourishment, which in turn results in improved community health. Adult literacy causes declined undernourishment and enhanced economic growth. Therefore, South Asian countries should incorporate appropriate interventions based on health and nutritional evidence in the curricula of schools to, firstly, gear up the nutritional awareness and, secondly, to strive redistribution of income among the relatively poor, which may reduce the undernourishment to a significant extent.

scholarly journals An Empirical Analysis of the Link between Economic Growth and Exports in Côte d’Ivoire

2019 ◽  
Vol 12 (9) ◽  
pp. 94
Author(s):  
Daouda Coulibaly ◽  
Fulgence Zran Goueu
Keyword(s):  
Economic Growth ◽  
Gross Domestic Product ◽  
Causal Relationship ◽  
Empirical Analysis ◽  
Annual Data ◽  
Short Term ◽  
Causality Test ◽  
Long Run ◽  
The Relationship

This paper aims to analyze the relationship between exports and economic growth in Côte d’Ivoire. In order to achieve this objective, annual data for the period 1960-2017 were tested by using the cointegration approach of Pesaran, Shin and Smith, including the causality test of Breitung and Schreiber. According to our analysis it is only exports that drive economic growth and not the opposite. Exports act positively and significantly on economic growth in the short term as well as in the long term. The causality test of Breitung and schreiber indicates a one-way long-run causal relationship ranging from exports to gross domestic product (GDP). All those results show that exports are a source of Ivorian economic growth.

scholarly journals GASTO PÚBLICO Y CRECIMIENTO EN AMÉRICA LATINA: LA LEY DE WAGNER Y LA HIPÓTESIS DE KEYNES

2021 ◽  
Vol 80 (316) ◽  
pp. 109
Author(s):  
Eduardo Ramírez Cedillo ◽  
Francisco López Herrera
Keyword(s):  
Economic Growth ◽  
Latin America ◽  
Latin American ◽  
Public Spending ◽  
Short Term ◽  
The Subject ◽  
America Latina ◽  
The Relationship ◽  
Latin American Countries

<p>Se analiza la relación del crecimiento económico con el gasto público de 16 países latinoamericanos de 1990 a 2017. Este trabajo contribuye a la literatura sobre el tema enfocándose en la región. Los resultados de un modelo para paneles cointegrados respaldan la ley de Wagner en el largo plazo y brindan evidencia parcial a favor de las hipótesis de Keynes en el corto plazo.</p><p><strong> </strong></p><p align="center">PUBLIC SPENDING AND GROWTH IN LATIN AMERICA:</p><p align="center">WAGNER´S LAW AND KEYNES’S HYPOTHESIS<strong></strong></p><p align="center"><strong>ABSTRACT</strong></p><p>The relationship between economic growth and public spending in 16 Latin American countries from 1990 to 2017 is analyzed. This paper contributes to the literature on the subject focusing on the region. The results from a model of cointegrated panels support Wagner’s Law in the long term and provides partial evidence in favor of the Keynesian hypotheses in the short term.</p>

scholarly journals PENGARUH E-COMMERCE, INFLASI, DAN NILAI TUKAR TERHADAP PERTUMBUHAN EKONOMI INDONESIA

2020 ◽  
Vol 2 (1) ◽  
pp. 151
Author(s):  
Widya Ayu Lastri ◽  
Ali Anis
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Error Correction ◽  
Secondary Data ◽  
Term Effect ◽  
Short Term ◽  
Correction Model ◽  
Descriptive Research ◽  
Long Term Effect

This Study aims to examine and to analisys the influencing factors on economic growth in Indonesia, which the variables are e-commerce, inflation and exchange rate. This study is associative descriptive research, which using secondary data from 2011Q1-2018Q4 that obtained from relevant institutions and agencies. Analisys using Error Correction Model (ECM) method. This study using Ordinary Lest Square (OLS) method to know the long term effect and ECM to know the short term effect at one blow.The study found that in the long term, e-commerce and exchange rate have a significant effect and inflation have not a significant effect. And in the short term, e-commerce have a positive and significant effect, while inflation and exchange rate have a negative and not significant.

Health Expenditure and Economic Growth Nexus: Empirical Evidence from South Asian Countries

2020 ◽  
pp. 097215092096306
Author(s):  
Narayan Sethi ◽  
Saileja Mohanty ◽  
Aurolipsa Das ◽  
Malayaranjan Sahoo
Keyword(s):  
Economic Growth ◽  
South Asian ◽  
Health Expenditure ◽  
Institutional Quality ◽  
Ordinary Least Squares ◽  
Asian Countries ◽  
Short Term ◽  
Causality Test ◽  
Cointegration Tests

This study aims to empirically investigate the short-term and long-term effects of healthcare expenditure, institutional quality and domestic and foreign investments on the economic growth of South Asian countries during the period 1996–2018. The pooled ordinary least squares (OLS) and random effects models, Johansen–Fisher cointegration test and Granger causality test have been employed to assess the short-term and long-term relationships and the direction of causality among the variables. The cointegration tests indicate the existence of a long-term equilibrium among the variables. The results reveal that there runs a bidirectional causality from health expenditure to economic growth in the concerned countries in the short run. Further, institutional quality is seen to have a unidirectional effect on health expenditure. Therefore, the authorities of the South Asian nations are required to strengthen the accessibility to and affordability and accountability of the healthcare services being provided to their population.

scholarly journals Distributive Politics, Nature of Government Spending and Economic Growth in a Low Income Democracy

2011 ◽  
Vol 16 (30) ◽  
pp. 31-49
Author(s):  
Joydeb Sasmal ◽  
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
Government Spending ◽  
Public Expenditure ◽  
Low Income Countries ◽  
Short Term ◽  
Tax Rate ◽  
Behavioral Parameters ◽  
The Government

In this paper we analyze how the government in a democratic setup of the developing world manipulates the fiscal instruments to maximize its political gain so that it can retain power. The government and the voters in low income countries are generally selfish and myopic in the sense that the electorates prefer to get direct and immediate benefits from the government while the government, in turn, tries to seek majority support in the election, by adopting short term and distributive policies instead of going for long term growth. Using the theoretical structure of the existing literature, and making modifications therein, this study demonstrates that the optimal tax rate, public expenditure shares and growth rate are determined in terms of technological and behavioral parameters. The simulation results show that if political gain from distributive policies is high, the government will allocate a greater share of the fund for distributive purposes adversely affecting economic growth.

scholarly journals Understanding Causality Relation among FDI, Foreign Trade and Economic Growth

2020 ◽  
Vol 9 (4) ◽  
pp. 414-426
Author(s):  
Saimul Saimul ◽  
Arif Darmawan
Keyword(s):  
Economic Growth ◽  
Foreign Trade ◽  
Significant Relationship ◽  
Time Series Data ◽  
Analytical Techniques ◽  
Series Data ◽  
Short Term ◽  
Causality Test ◽  
Causality Relationship

This study aims to analyze the causality relationship between Foreign Direct Investment (FDI), Foreign Trade, and Economic Growth in Indonesia using quarterly time-series data from Q1-2004 to Q2-2019. This study uses co-analytical techniques, VECM integration, and Engle-Granger causality. The results of a two-way causality test happen between export and GDP variables, as well as import and GDP variables. In other words, foreign trade has an essential role in increasing economic growth in Indonesia. However, the two-way causality relationship takes place only in the short term. In the long run, it does not occur; what happens in the long term is an only one-way relationship, namely from foreign trade (X and M) to economic growth. While export and import relations have an only one-way relationship, namely from import growth to export growth, and this relationship only happens in the short term. In contrast, in the long term, it has no significant relationship. Likewise, the one-way relationship also takes place from imports to FDI in the short term. At the same time, export variables and GDP variables do not have a significant relationship with FDI variables. In the long-term economic growth, it turns out to be very instrumental in increasing both FDI, exports, and imports.

scholarly journals Capital flows and economic growth across spectral frequencies: Evidence from Turkey

2012 ◽  
Vol 59 (4) ◽  
pp. 441-462 ◽  
Author(s):  
Nuri Yildirim ◽  
Huseyin Tastan
Keyword(s):  
Economic Growth ◽  
Capital Flows ◽  
Short Term ◽  
Causality Test ◽  
Government Bonds ◽  
Frequency Bands ◽  
Long Run ◽  
Variance Decompositions ◽  
Portfolio Investments

This paper examines interactions and feedbacks between categories of capital flows and economic growth in Turkey for the 1992:01-2009:08 period. Our empirical analysis is based on a new version of the causality test of John Geweke (1982, p. 77) and Yuzo Hosoya (1991, p. 88) in the frequency domain proposed recently by J?rg Breitung and Bertrand Candelon (2006, p. 132). In addition, using standard methods in spectral analysis, we decompose the total covariance between capital flows and growth across main frequency bands and capture lead/lag interactions between them. Some of our findings are as follows: Variance decompositions over frequency bands reveal that variations in individual capital flow categories are largely concentrated over high (seasonal) frequencies. The nature of the interaction/feedback between growth and capital flows varies significantly over frequency bands and subcategories of flows. Over business cycle frequencies, two out of four subcategories of inflows, short-term external borrowings and portfolio investments on government bonds, drive growth whereas the other two components, long-term borrowings and portfolio investments on shares, are driven by growth. Furthermore, for the post-2001 financial crisis period we found significant bidirectional causality between long-term external borrowings and growth whereas portfolio investments, bond flows and short-term external borrowings do not affect growth in the long run.

scholarly journals Trade and Economic Growth: The Case of India

2017 ◽  
Vol 4 (01) ◽  
Author(s):  
Simran Sethi
Keyword(s):  
Economic Growth ◽  
Granger Causality Test ◽  
Annual Data ◽  
Short Term ◽  
Causality Test ◽  
The Third ◽  
Long Run ◽  
Short Run ◽  
Growth Hypothesis

The objective of this paper is to investigate the short run as well as long run relationship between GDP, exports and imports for India using annual data from 1982 to 2016. Through this paper, I examine the four main hypotheses regarding the relation between exports, imports and economic growth. The first one is export-led growth hypothesis, the second one is the import-led growth hypothesis, the third one is the growth-led exports and lastly, the growth-led imports hypothesis. The Johansen’s cointegration is used to examine the long term relationship and empirical results indicate that there is a long run relationship between GDP, exports and imports. The short term relationship is measured using the Granger causality test and the statistical results suggest unidirectional causality from GDP to exports and GDP to imports in conformity with the growth-led exports and growth-led imports hypothesis respectively.

scholarly journals VECM Model Analysis of Carbon Emissions, GDP, and International Crude Oil Prices

2018 ◽  
Vol 2018 ◽  
pp. 1-11 ◽  
Author(s):  
Xiaohua Zou
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Carbon Emissions ◽  
Natural Capital ◽  
Great Influence ◽  
Oil Prices ◽  
Oil Price ◽  
Short Term ◽  
Causality Test

As a kind of scarce natural capital, energy makes more and more obvious constraint effects on economic growth. And energy consumption is the major source of greenhouse gas emissions. This brings about the problems of the relationships among energy consumption, carbon emissions, and economic growth, which is worthy of long-term attention. This paper attempted to explore the interactive relations among American oil prices, carbon emissions, and GDP through the data analysis from 1983 to 2013. This paper adopted time series vector error correction model (VECM) approach to conduct stationarity test, cointegration test, stability test, and Granger causality test. The results indicated that, no matter in the short term or long term, oil price fluctuation is the reason why carbon emissions change, while the GDP fluctuation is not the reason for the growth of carbon emissions. The oil price impacts will have a great influence on GDP and carbon emissions in the short term, but, the in long term, the influence will tend to be gentle.

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