scholarly journals A Test of the McKinnon’s Complementarity Hypothesis between Money and Physical Capital in the Case of Kyrgyzstan

2011 ◽  
Author(s):  
Harun Doğan
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Soviet Union ◽  
Financial Liberalization ◽  
Time Series Data ◽  
Developing Economies ◽  
Physical Capital ◽  
Series Data ◽  
Real Rate ◽  
Complementarity Hypothesis

The main purpose of this study is to empirically investigate the validity of McKinnon’s complementarity hypothesis on economic growth of Kyrgyzstan for the period of 1996–2009. McKinnon’s (1973) central thesis argues poorly functioning financial systems in developing countries may effect investment quality and growth rate of the economy in negative direction. McKinnon’s (1973) complementary hypothesis predicts that money and investment are complementary, to the contrast neoclassical and Keynesian theory, due to a self-financed investment in developing economies. In other words, according to McKinnon, financial liberalization should generate positive impacts on growth as consequence of positive relation between money and physical capital in developing countries after financial liberalization. The empirical researches conducted on complementarity hypothesis have found mixed results on the link between money and physical capital. However, empirical analysis of Kyrgyzstan’s economy is very important because of its peculiarities, it has both a trancition and developing economy, which in case of the McKinnon’s complementarity hypothesis is very essential. Thus, Kyrgyzstan, as many developing countries, have undertaken financial liberalization programs during the past twenty years after collapse of Soviet Union. Therefore, the study analyzes long run and short run association among the real rate of interest on deposits, private investments, economic growth, and domestic savings behavior in Kyrgyzstan, using annual time series data for 1996-2009 with techniques of ARDL Cointegration Error Correction Model. The results does not support the McKinnon’s complementarity hypothesis between money and physical capital on the period for 1996-2009 in the Kyrgyzstan’s Economy.

scholarly journals An Evaluation of the Determinants of Remittances: Evidence from Nigeria

2015 ◽  
Vol 1 (2) ◽  
Author(s):  
Temitope Laniran ◽  
◽  
Daniel Adeniyi
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Capital Accumulation ◽  
Time Series Data ◽  
Developing Economies ◽  
Growth Models ◽  
Series Data ◽  
Macroeconomic Factors ◽  
Financial Flows ◽  
High Level

International remittances have grown to become an integral source of finance for development. Existing literature posits that there is an association between remittances and growth in developing countries. Economic growth models highlight the importance of capital accumulation and high level financial flows, the inadequacy of which characterizes developing countries and often explains their fate. It is argued that remittances will provide a panacea to the serious poverty experienced in such developing economies by increasing financial flows and household income, which in turn stimulates consumption, savings, economic growth and ultimately development. The robustness of this relationship is, however, often questioned. Indeed, the propensity of remittances to achieve these aspirations very much hinges on the determining factors motivating the remitters and the magnitude of the remittances. Hence, given the significant flows of remittances to the developing countries, this study attempts an analysis of the determinants of remittances to Nigeria. Key macroeconomic variables with theoretical potentials of influencing the level of remittances received were subjected to econometric model testing using time series data from 1980 to 2013. The results indicate that the level of remittances received is more a function of portfolio motives than other macroeconomic factors.

scholarly journals Financial innovation and economic growth: evidence from Zimbabwe

2016 ◽  
Vol 13 (2) ◽  
pp. 65-75 ◽  
Author(s):  
Alex Bara ◽  
Calvin Mudzingiri
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Time Series Data ◽  
Financial Time Series ◽  
Financial Innovation ◽  
Dark Side ◽  
Series Data ◽  
Distributed Lag ◽  
Long Run ◽  
Causality Tests

The role of financial innovation on economic growth in developing countries has not been actively pursued. Stemming from the finance-growth nexus, literature suggests that financial innovation has a relationship to growth, which could be either positive or negative. Implicitly, financial innovation has a good and a dark side that affects growth. This study establishes the causal relationship between financial innovation and economic growth in Zimbabwe empirically. Using the Autoregressive Distributed Lag (ARDL) bounds tests and Granger causality tests on financial time series data of Zimbabwe for the period 1980-2013, the study finds that financial innovation has a relationship to economic growth that varies depending on the variable used to measure financial innovation. A long-run, growth-driven financial innovationis confirmed, with causality running from economic growth to financial innovation. Bi-directional causality also exists after conditionally netting-off financial development. Policies that enhance economic growth inter-twined with financial innovation are essential, if developing countries, such as Zimbabwe, aim to maximize economic development

scholarly journals A Correlative Analysis of Modern Logistics Industry to Developing Economy Using the VAR Model: A Case of Pakistan

2020 ◽  
Vol 2020 ◽  
pp. 1-10
Author(s):  
Salman Hanif ◽  
Dong Mu ◽  
Saranjam Baig ◽  
Khalid Mehmood Alam
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Developing Countries ◽  
Economic Development ◽  
Developing Economies ◽  
Series Data ◽  
Var Model ◽  
Modern Logistics ◽  
Logistics Industry ◽  
Sustainable Economic Development

The modern logistics industry has opened new strategic perspectives in establishing its interrelation with economic growth. In recent years, understanding such an overlap has become a policy issue considering ever-increasing factors and their influence on this relation. Most existing studies have explored this interaction from a general perspective, or for developed countries. This paper explores time-series analysis of the dynamic variables and their inter-related influence in both the short and long run on the relationship between modern logistic industry and economic growth—a more specific perspective, particularly for developing countries. Accordingly, we exemplify our analysis by employing the vector autoregression (VAR) model to the most updated time series data of investment in the logistics industry and the economic growth of Pakistan from 1990 to 2018. The empirical findings endorse the previous studies’ outcomes and recognize the importance of sustainable economic development concerning continuously improving the logistics industry. However, a unidirectional relation is observed that economic growth leads to developing the logistics industry—economic growth exerts a significant demand-pull effect on Pakistan’s logistics. It implies that logistic industrial development is comparatively quicker in the geographical areas where economic growth is higher than those areas where economic growth is low. To conclude this study’s findings, logistics industry reforms should prioritize the selected geographical areas in improving the economy that would lead to the modern logistics industry’s development. As the model adopts Pakistan’s context, the overall statistical analysis can be generalized to other developing economies. These results would be of particular interest to strategy makers working in developing countries and help them design and develop modern transportation and logistics, coupled with interlinked technological factors, which would attract investment in the logistics industry for sustainable economic development.

scholarly journals The Effects of External Debts on Economic Growth of Kyrgyzstan

2017 ◽  
Author(s):  
Tolkun Zhumakunova ◽  
Zhainagul Kydyralieva
Keyword(s):  
Economic Growth ◽  
Soviet Union ◽  
Foreign Currency ◽  
Time Series Data ◽  
Negative Impact ◽  
Empirical Studies ◽  
Foreign Debt ◽  
Series Data ◽  
Least Squares Regression ◽  
Adf Test

In developing countries, insufficient internal sources cause the increase of need on external sources. These countries in order to maintain their economic growth apply for external debt to cover the gap of foreign currency and savings. After the collapse of Soviet Union, Kyrgyzstan began to use external funds. It is very important to use these sources in accurate areas and efficiently. Most empirical studies indicate a negative correlation between foreign debt and economic growth, especially in those countries whose foreign debts are relatively high. This work examines the correlation between foreign debt and economic growth in Kyrgyz economy. Toward this objective, it uses the economic indicators of Kyrgyzstan between 1993 and 2015. The stationarity of time series data used in this study was tested by the ADF test. Than a least-squares regression analysis is performed. According to the findings of study, foreign debt in Kyrgyzstan have a negative impact on economic growth. According to results foreign debt should be reduced in order to increase the level of economic growth in Kyrgyzstan.

Financial development and economic growth in Tanzania: an ARDL and bound testing approach

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Saganga Mussa Kapaya
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Time Series Data ◽  
Developing Economies ◽  
Financial System ◽  
Principal Component ◽  
Series Data ◽  
Content Type ◽  
Testing Procedures ◽  
Positive Effects

Purpose The purpose of this study is to empirically weigh the evidence for financial depth, liquidity and efficiency role to economic growth, and test for the existence of cointegration between financial development variables and economic growth in Tanzania. Design/methodology/approach The study used the autoregressive distributed lag model with bound testing procedures. The sample covered yearly time-series data from 1980 to 2017, i.e. 38 years. Findings The results suggest that financial system depth is positively related to economic growth in the short run and that financial system liquidity and efficiency is strongly negatively associated with economic growth both in the short and long run. Further, it is found that financial development is cointegrated with economic growth. Thus, financial reforms and liberalisation have not fully brought the desired positive effects on economic growth yet. Originality/value The study uses principal component analysis to capture specific dimensions within the financial system as an intuitive way to aggregate financial development effects. Unlike studies that included several countries with heterogeneous characteristics, which are sometimes difficulty to homogenise, in recognition of countries’ unique experiences, this study uses data from Tanzania as a specific case. It documents pertinent pieces of evidence for a developing economy necessary for financial policy adjustments post the financial and economic liberalisation and reforms period. It nevertheless sheds light on financial policies for other comparable developing economies during and after both financial and economic liberalisation settings.

scholarly journals ANALISIS PENGARUH INFRASTRUKTUR PUBLIK TERHADAP PRODUK DOMESTIK BRUTO PERKAPITA DI INDONESIA

IQTISHODUNA ◽  
2012 ◽  
Author(s):  
Eko Fajar Cahyono, David Kaluge
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Gross Domestic Product ◽  
Time Series Data ◽  
Positive Impact ◽  
Physical Capital ◽  
Domestic Product ◽  
Series Data ◽  
Public Infrastructure ◽  
Correction Model

This study aims to measure how far the influence of public infrastructure such as roads, electricity,  and telephone  to Gross Domestic Product in Indonesia. This research is based on the theory of classical and neoclassical economic growth which assumes that the infrastructure is physical capital that relate either directly or indirectly to economic growth. This research used error correction model  analysis and time series data. Based on estimates found that public infrastructure have a significant and positive impact on Gross Domestic Product.

scholarly journals DETERMINAN PERTUMBUHAN EKONOMI

2007 ◽  
Vol 6 (1) ◽  
Author(s):  
Suyanto . ◽  
Anika Widiana
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Physical Capital ◽  
Series Data ◽  
Institutional Factor ◽  
Positive Effects ◽  
Long Run ◽  
Stationary Test ◽  
Short Run ◽  
The Government

This study examines the determinants of Growth in Indonesia using time series data from the first quarter of 1980 to fourth quarter of 2000. The result of OLS regression model shows that labor, physical capital, human capital, openness, and an institutional factor give positive effects to economic growth in Indonesia. This finding supports the arguments presented by neo-classical economists. The effect of institutional variable (e.g. inflation), in particular, exhibit the intervention of the central bank and the government in inflation and economic growth. Since the estimators consist of autocorrelation, the stationary test is applied to test the integration degrees and co-integration methodology is adopted to examine the linear combination of selected variables. The Granger’s two step error correction model tells us that the short-run disequilibrium is divergent from time to time from the long-run equilibrium, with the moderate speed of divergence. However, at least the long-run OLS estimators are unbiased, consistent, and asymptotically normally distributed.

scholarly journals NEXUS BETWEEN HUMAN CAPITAL AND ECONOMIC GROWTH: EVIDENCE FROM GROWTH MODEL IN PAKISTAN

2018 ◽  
Vol 01 (01) ◽  
Keyword(s):  
Economic Growth ◽  
Global Economy ◽  
Time Series Data ◽  
Good Governance ◽  
Empirical Finding ◽  
Physical Capital ◽  
Parameters Estimation ◽  
Series Data ◽  
Capita Health Expenditure ◽  
The Impact

In the global economy, every country wants to boost the economic development of the economy in the nation. In this, good governance can play significant role in development of the economy. The present study aims at investigating the impact of human and physical capital on economic growth in Pakistan. Annually time series data is used for analysis during the period of 1980-2016. The data has been taken from the ‘Pakistan Economic Survey’ and ‘A Handbook of Statistics 2015’. The ADF (Augmented Dickey-fuller) test is used for stationary and non-stationary process. For parameters estimation and co-integration, the Engle-Granger approach is used to indicate that there is long-run connection among the study concerned variables. The empirical finding of this study demonstrated that gross fixed capital formation, literacy rate, per-capita health expenditure and secondary school enrolment rate have a significant impact on the economic growth of Pakistan. There is co-integration among variables of the model.

scholarly journals Impact of Globalization on Budget Deficit, Inflation and Economic Growth: The Case of Pakistan

2020 ◽  
Vol 8 (1) ◽  
pp. 62-83
Author(s):  
Saira Mumtaz ◽  
◽  
Muhammad Zeeshan Younas ◽  
Keyword(s):  
Economic Growth ◽  
Budget Deficit ◽  
Financial Liberalization ◽  
Time Series Data ◽  
Trade Openness ◽  
Sustainable Growth ◽  
Series Data ◽  
Modern World ◽  
Budget Deficits ◽  
Distributed Lag

Globalization is a multi-dimensional phenomena with profound impact on different aspects of the modern world including economic, social, political, cultural, environmental, and geographical. This study is an attempt to analyze the subject that how various components of globalization i.e. trade openness, financial liberalization and labor mobility impact the economic dynamics of a developing country by affecting the performance of selected macroeconomic variables including budget deficit, inflation and economic growth. In this particular research we used the terms trade openness and liberalization along with financial openness, financial liberalization and financial development interchangeably. The purpose is to capture the overall impact irrespective of the nature as considering nature would lead to contradictory results. The increasing importance of labor flow is also given due attention in this study as human capital is an inevitable avenue for the effective and sustainable growth of any country. Various global factors effect budget deficits, inflation and economic growth with varying intensities depending upon the size and dynamics of the economy. The empirical analysis involves the time series data for years 1973-2014 for the case of Pakistan. The Autoregressive distributed lag (ARDL) methodology is used to derive the results and conclusion further seconded by the policy suggestions made in the light of this study.

scholarly journals PENGGUNAAN METODE ARIMA DALAM MERAMAL PERGERAKAN INFLASI

2017 ◽  
Vol 18 (1) ◽  
pp. 1-10
Author(s):  
Hartati Hartati
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Developing Countries ◽  
Time Series Data ◽  
Moving Average ◽  
Series Data ◽  
Autoregressive Integrated Moving Average

Inflation is a problem which haunts the economy of each country. Its development is which continually increasing make a drag on economic growth to a better direction. Inflation tends to occur in developing countries like Indonesia which is an agricultural country. To overcome the instability of inflation, one way to do is to predict the time series data. Methods Autoregressive Integrated Moving Average (ARIMA) has the ability to capture the necessary information about the wood as well as able to cope with the instability of inflation of inflation. This is because ARIMA is a method of forecasting time series are suited to predict the number of variables in a fast, simple, inexpensive, accurate, and only requires the data variables to be predicted. Inflasi merupakan suatu masalah yang menghantui perekonomian setiap negara. Perkembangannya yang terus-menerus mengalami peningkatan menjadi hambatan pada pertumbuhan ekonomi ke arah yang lebih baik. Perubahan laju inflasi cenderung terjadi pada negara-negara berkembang seperti halnya Indonesia yang merupakan negara agraris. Untuk menanggulangi terjadinya ketidakstabilan laju inflasi, salah satu cara yang dapat dilakukan adalah dengan meramalkan data time series. Metode Autoregressive Integrated Moving Average (ARIMA) memiliki kemampuan untuk menangkap informasi-informasi yang diperlukan mengenai laju inflasi serta mampu menanggulangi ketidakstabilan dari laju inflasi. Hal ini dikarenakan ARIMA merupakan suatu metode peramalan time series yang cocok digunakan untuk meramal sejumlah variabel secara cepat, sederhana, murah, dan akurat serta hanya membutuhkan data variabel yang akan diramal.

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