scholarly journals CAPITAL MARKET DEVELOPMENT AND ECONOMIC GROWTH: AN ARDL APPROACH FOR SAUDI ARABIA, 1985–2018

2020 ◽  
Vol 0 (0) ◽  
pp. 1-22
Author(s):  
Abdulaziz Hamad Algaeed
Keyword(s):  
Economic Growth ◽  
Capital Market ◽  
Price Index ◽  
Share Price ◽  
Market Development ◽  
Gdp Growth ◽  
Index Number ◽  
Per Capita Gdp ◽  
Per Capita ◽  
The Capital Market

The aim of this paper is to analyze and test the effects of capital market development on the per-capita GDP growth in Saudi Arabian economy covering the period of 1985-2018. An ARDL, FMOLS and Johansen tests are implemented. The stock market indicators: share price index, capitalization, liquidity, number of share transactions, and number of shares are employed using a log-linear eclectic model designed to fit the availability of data. Capitalization and liquidity came up with negative signs, contrary to the findings of lots of studies in economic literature. However, the share price index, number of shares traded, and the ratio of number of share transactions had the right signs as expected a priori. The findings raise serious questions about the size of the market, the steps and efforts that have been taken to deepen the capital market and their consequences on the function and potency of capital market in fostering per-capita GDP growth. Applying Granger causality test, share price index, market capitalization and number of shares traded do not granger cause per-capita GDP. They are significant at 5 percent level. Capital market authority (CMA) should draw a road map to accelerate deepening the capital market in order to serve economic growth.

Tests of a more comprehensive model of economic growth in lower middle-income countries

2018 ◽  
Vol 45 (1) ◽  
pp. 46-58 ◽  
Author(s):  
Minh Quang Dao
Keyword(s):  
Economic Growth ◽  
Total Population ◽  
Gdp Per Capita ◽  
Gdp Growth ◽  
Comprehensive Model ◽  
Government Consumption ◽  
Middle Income ◽  
Per Capita Gdp ◽  
Content Type ◽  
Per Capita

Purpose The purpose of this paper is to empirically test a more comprehensive model of economic growth using a sample of 28 lower middle-income developing countries. Design/methodology/approach The authors modify the conventional neoclassical growth model to account for the impact of the increase in the number of people working relative to the total population and that of the increase in the value added per worker over time. The authors then extend this model by incorporating the role of trade, government consumption, and human capital in output growth. Findings Regression results show that over three quarters of cross-lower middle-income country variations in per capita GDP growth rate can be explained by per capita growth in the share of public expenditures on education in the GDP, per capita growth in the share of government consumption in the GDP, per capita growth in the share of imports in the GDP, per capita growth in the share of manufactured exports in the GDP (not of that of total exports in the GDP), and the growth of the working population relative to the total population. Practical implications Statistical results of such empirical examination will assist governments in these countries identify policy fundamentals that are essential for economic growth. Originality/value To address the simultaneity bias, the authors develop a simultaneous equations model and are able to show that such model is more robust and helps explains cross-country variations in per capita GDP growth over the 2000-2014 period.

scholarly journals Optimistically biased economic growth forecasts and negatively skewed annual variation

2020 ◽  
Author(s):  
Matthew G. Burgess ◽  
Ryan E. Langendorf ◽  
Tara Ippolito ◽  
Roger Pielke
Keyword(s):  
Economic Growth ◽  
Growth Rates ◽  
Time Windows ◽  
Gdp Growth ◽  
Average Growth ◽  
Per Capita Gdp ◽  
Negative Skewness ◽  
Per Capita ◽  
Growth Volatility ◽  
Growth Forecasts

Authoritative economic growth forecasts are often optimistically biased. Negatively skewed variation--negative shocks being larger than positive shocks--could contribute to bias by making long-run average growth smaller than typical-year (median) growth. This positively biases forecasts based on typical years. We compare medians and means in real per-capita GDP growth across countries, regions, and time windows from 1820-2016. Over decadal periods, we find mean growth rates <1%/y smaller than median growth rates in most countries and regions (median 0.23%/y across countries). Surprisingly, we find both large- and medium-magnitude shocks contribute to these differences, rather than only large ‘black swan’ events. We find negative skewness correlated with high levels and slow growth of per-capita GDP and population, and high per-capita GDP growth volatility, building on previous studies. We find negative skewness alone insufficient to explain recent growth over-projections by the International Monetary Fund (IMF) and the U.S. Congressional Budget Office (CBO).

scholarly journals Property Systems and Economic Growth in Japan, 730–1874

2020 ◽  
Vol 23 (2) ◽  
pp. 147-184
Author(s):  
Masaki NAKABAYASHI ◽  
Kyoji FUKAO ◽  
Masanori TAKASHIMA ◽  
Naofumi NAKAMURA
Keyword(s):  
Economic Growth ◽  
Early Modern Period ◽  
17Th Century ◽  
Eighth Century ◽  
Gdp Growth ◽  
13Th Century ◽  
Per Capita Gdp ◽  
Annual Series ◽  
12Th Century ◽  
Per Capita

Abstract New estimates on the premodern economic growth of Japan, based on more concrete evidence, have been presented. We revise the estimates of Japan’s gross domestic product (GDP) from the mid-eighth century to the mid-19th century and its population in the 12th century and describe the institutional transformations that correspond to the output changes. The revision of output and population results in updated estimates of per capita GDP for the medieval period and extension of the growth estimates in the early modern period to the annual series for 1651–1841. This study employs the techniques of quantitative inference and descriptive interpretation of the estimated performance. The findings show that: (a) Both the GDP and population significantly declined towards the 12th century, stagnated and experienced recovery from the 13th century onwards, and then continued to grow through the 17th century; (b) GDP growth accelerated in the 18th and 19th centuries; and (c) per capita GDP growth began to rise in the 13th century after a sharp decline from the 10th to 12th centuries. It continued to rise through the 16th century but declined again in the mid-17th century and finally rose again from the late 17th century onwards.

scholarly journals Effects of Capital Market Development on the Economic Growth of Nigeria

2021 ◽  
Vol 7 (2) ◽  
pp. 30-46
Author(s):  
Udo Ginikachi Cynthia ◽  
Nwezeaku Nathaniel Chinedum ◽  
Kanu Success Ikechi
Keyword(s):  
Economic Growth ◽  
Capital Market ◽  
Unit Root Test ◽  
Secondary Data ◽  
Market Development ◽  
Index Number ◽  
Stock Market Development ◽  
Distributed Lag ◽  
Long Run ◽  
The Government

This study examines the effect of capital market development on the economic growth of Nigeria using data on Real Gross Domestic Product as a proxy for economic growth while capital market variables constitute the independent variables. This includes Market Capitalization, All Share Index, Number of Listed Securities and the number of listed companies The study adopted an expost-facto research design which utilized secondary data for the period 1983 -2016. While an Augmented Dickey-Fuller unit root test was used for preliminary analysis; an Autoregressive Distributed Lag (ARDL) was used for the model estimation. .A combination of ARDL bounds test for co-integration, ARDL short and long run error correction models were used for estimation. All the tests helped to confirm the integrity of our models. Findings of the study indicate that, the Number of listed Securities and All Share Index maintained a significant relationship with economic growth in Nigeria both in the short and long runs. Based on the findings of study it was recommended that government should help to remove all impediments to stock market development in the form of tax, legal and regulatory barriers as they act as disincentives to investments in the capital market. Again, government should help to maintain policy consistency in the pursuit of growth in the Nigerian capital market. By so doing, counter developmental policies should not be allowed to crowd out the gains of capital market development and by extension on economic growth in the long run. Lastly the government should find ways and means of boosting the confidence of investors to retain their portfolio investments.

scholarly journals The Impact of Foreign Aid on Economic Growth in Ethiopia

2012 ◽  
Vol 13 (2) ◽  
pp. 87-112
Author(s):  
Mohammed Seid Hussen ◽  
Kye Woo Lee
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Positive Impact ◽  
Aid Effectiveness ◽  
Gdp Growth ◽  
Domestic Investment ◽  
Per Capita Gdp ◽  
Democratic Regimes ◽  
Per Capita ◽  
The Impact

This paper investigates the impact of foreign aid on investment and economic growth of Ethiopia for the period 1971-2010. The result indicates that foreign aid has a statistically significant positive impact on domestic investment, while aid’s positive impact on per capita GDP growth does not depend on any macroeconomic policy conditionality. Rather, aid effectiveness depends on the peculiar social, political and economic institutions of particular periods. Aid is effective during both socialist and democratic regimes. However, aid’s impact on growth was greater for socialist regimes.

scholarly journals Capital Market Linkage to Economic Growth in Nepal

2020 ◽  
Vol 4 (1) ◽  
pp. 43-56
Author(s):  
Jhabindra Pokharel
Keyword(s):  
Economic Growth ◽  
Capital Market ◽  
Time Series Data ◽  
Secondary Market ◽  
Market Development ◽  
Series Data ◽  
Individual Investors ◽  
Fair Price ◽  
Market Capitalization ◽  
The Capital Market

This article examines the causal relationship between capital market development and economic growth in Nepal using annual time series data from 1994-2019. Total market capitalization is used as a proxy of secondary market development and the total public issue of securities in a particular year is taken as an indicator of primary market development. Using the Johansen cointegration test and vector error correction method (VECM) in regression analysis, the study reveals that capital markets in Nepal are supporting economic growth through efficient fundraising, efficient allocation of resources, fair price determination and liquidity. The findings from this study conclude that there is a unidirectional causality running from capital market development to economic growth in both the long-run and short-run. However, this study found no support for causality running from economic growth to the capital market. Therefore, the findings from this study recommend policies that increase the reach of the capital market to small and medium enterprises (SMEs) and individual investors. Keywords: capital market, market capitalization, primary market, economic growth, Nepal

scholarly journals A panel causality analysis of the relationship between financial development and economic growth in OECD countries

2021 ◽  
Vol 9 (2) ◽  
pp. 662-672
Author(s):  
Sevilay Küçüksakarya
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
Financial Development ◽  
Gdp Growth ◽  
Causality Test ◽  
Panel Causality ◽  
Per Capita Gdp ◽  
Domestic Credit ◽  
Per Capita ◽  
The Relationship

This study examines the relationship between financial development and economic growth. Thus, this study aims to find empirical shreds of evidence for the direction of the causality between financial development proxied by domestic credit to the private sector and per capita GDP growth by using the panel granger causality test of the Dumitrescu-Hurlin Test. For this purpose, we used a panel of 16 OECD countries from 2008 to 2019 to provide evidence of whether the supply leading hypothesis or demand following hypothesis or both holds. All econometric exercises are carried out for whole countries and high-income countries, and upper-middle-income country groups in the sample. Due to cross-sectional dependence among the sample countries, we determine the degree of integration of each variable by employing the second-generation panel unit root tests of CIPS. We continue our analysis with the panel causality test developed by Dumitrescu and Hurlin (2012) to determine the direction of the causality between variables. For this purpose, we performed three sets of causality analyses. In the first one, we include all countries in the panel. We then divided the countries into two sub-groups based on the income classification and the level of financial development in these countries proxied by domestic credit to the private sector. The causality test results, including all countries in the sample, indicate that the hypothesis holds the supply leading hypothesis during the sample period. This means that even though this panel contains countries with a development level, financial development still seems to be a pre-condition for economic growth for these nations. We also obtain the same results when we include high-income countries in the sample. The study results provide compelling evidence for the relationship between economic growth and financial development since the sample includes countries with different levels of financial development with different degrees of per capita GDP growth.

scholarly journals Financial development and economic growth in developing countries: evidence from Saudi Arabia

2014 ◽  
Vol 11 (2) ◽  
pp. 718-742
Author(s):  
Meshaal J. Alshammary
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Capital Market ◽  
Small And Medium Enterprises ◽  
Market Development ◽  
Gdp Growth ◽  
Var Models ◽  
Real Gdp ◽  
Medium Enterprises

This study investigates the long-term and short-term relationships between capital market development and economic growth in the Kingdom of Saudi Arabia (KSA) for the period from January 1993 to December 2009. It employs a wide range of vector autoregression (VAR) models to evaluate the importance and impact of capital market development on economic growth. We used real GDP growth rates and None Oil GDP as proxies for economic growth and the stock market index (SMI), the bank credits to the private sector (BCP) and the broad money supply (M2) as proxies for the capital market development. The VAR models indicate a positive and significant long-term causal relationship between capital market development and economic growth. Granger causality tests show that economic growth Granger-cause capital market development and vice versa when using the real GDP growth rate variables. The study implications are as follows. Firstly, investment in real economic activities leads to economic growth. Secondly, the stock market might hinder economic growth due to its volatile and international risk sharing nature, low free-floating share ratio, number of listed companies and the domination of Saudi Individual Stock Trades (SIST) characteristics. Thirdly, policymakers should seek to minimise stock market volatility and fluctuations, increase both the free-floating share ratio and number of listed companies and shift investment domination toward corporate investors by considering its effect on economic growth when formulating economic policies. Fourthly, the banking sector might hinder economic growth due to its lack of small and medium enterprises lending and shareholder concentration issues. Finally, policymakers should seek to encourage banks toward more involvement in small and medium enterprises SMEs’ lending, which will strengthen the private sector role.

scholarly journals IPCC baseline scenarios have over-projected CO2 emissions and economic growth

2020 ◽  
Author(s):  
Matthew G. Burgess ◽  
Justin Ritchie ◽  
John Shapland ◽  
Roger Pielke
Keyword(s):  
Economic Growth ◽  
Co2 Emissions ◽  
Climate Science ◽  
Carbon Intensity ◽  
Gdp Growth ◽  
Baseline Scenario ◽  
Per Capita Gdp ◽  
Science And Policy ◽  
Catch Up ◽  
Per Capita

Scenarios used by the Intergovernmental Panel on Climate Change (IPCC) are central to climate science and policy. Recent studies find that observed trends and International Energy Agency (IEA) projections of global CO2 emissions have diverged from emission scenario outlooks widely employed in climate research. Here, we quantify the bases for this divergence, focusing on Kaya Identity factors: population, per-capita GDP, energy intensity (energy consumption/GDP), and carbon intensity (CO2 emissions/energy consumption). We compare 2005-2017 observations and IEA projections to 2040 of these variables, to “baseline” scenario projections from the IPCC’s Fifth Assessment Report (AR5), and from the Shared Socioeconomic Pathways (SSPs) used in the upcoming Sixth Assessment Report (AR6). We find that the historical divergence of observed CO2 emissions from baseline scenario projections can be explained largely by slower-than-projected per-capita GDP growth—predating the COVID-19 crisis. We also find carbon intensity divergence from baselines in IEA’s projections to 2040. IEA projects less coal energy expansion than the baseline scenarios, with divergence expected to continue to 2100. Future economic growth is uncertain, but we show that past divergence from observations makes it unlikely that per-capita GDP growth will catch up to baselines before mid-century. Some experts hypothesize high enough economic growth rates to allow per-capita GDP growth to catch up to or exceed baseline scenarios by 2100. However, we argue that this magnitude of catch-up may be unlikely, in light of: headwinds such as aging and debt, the likelihood of unanticipated economic crises, the fact that past economic forecasts have tended to over-project, the aftermath of the current pandemic, and economic impacts of climate change unaccounted-for in the baseline scenarios. Our analyses inform the rapidly evolving discussions on climate and development futures, and on uses of scenarios in climate science and policy.

scholarly journals Mortality, morbidity and economic growth

PLoS ONE ◽  
2021 ◽  
Vol 16 (5) ◽  
pp. e0251424
Author(s):  
Lorenzo Rocco ◽  
Elena Fumagalli ◽  
Andrew J. Mirelman ◽  
Marc Suhrcke
Keyword(s):  
Economic Growth ◽  
Health Impact ◽  
Gdp Growth ◽  
Disability Adjusted Life Years ◽  
Recent Period ◽  
Per Capita Gdp ◽  
Point Estimates ◽  
Disability Adjusted Life ◽  
Life Years ◽  
Per Capita

The question of whether and how changes to population health impact on economic growth has been actively studied in the literature, albeit with mixed results. We contribute to this debate by reassessing–and extending–[1], one of the most influential studies. We include a larger set of countries (135) and cover a more recent period (1990–2014). We also account for morbidity in addition to mortality and adopt the strategy of providing bounding sets for the effects of interest rather than point estimates. We find that reducing mortality and disability adjusted life years (DALYs), a measure which combines morbidity and mortality, promotes per capita GDP growth. The magnitude of the effect is moderate, but non negligible, and it is similar for mortality and DALYs.

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