scholarly journals Financial Intermediation and Economic Growth: Evidence from Rwanda

2017 ◽  
Vol 10 (2) ◽  
pp. 253-273 ◽  
Author(s):  
Sebuhuzu Gisanabagabo ◽  
Harold Ngalawa
Keyword(s):  
Economic Growth ◽  
Financial Services ◽  
Financial Intermediation ◽  
Developed Countries ◽  
Causal Link ◽  
Output Growth ◽  
Vector Autoregressive ◽  
Show Evidence ◽  
Short Run ◽  
Structural Vector Autoregressive Model

The relationship between financial intermediation and economic growth has been under investigation for decades. Some studies have been conducted using panels of countries with or without similar characteristics while others have been carried out on individual countries. In less-developed countries, the evidence about the link between financial intermediation and economic growth is particularly deficient. This study attempts to empirically investigate the possible cointegration and causal link between financial intermediation and economic growth in Rwanda, using quarterly data spanning from 1996Q1 to 2010Q4. A Structural Vector Autoregressive model is used to analyse the short-run dynamics between variables of interest. Findings of the study show evidence of a cointegrating relationship between financial intermediation and economic growth in the country. It is further observed that a shock to domestic private sector credit accounts for the largest proportion of fluctuations in real output growth, while the shock to potential liquidity comes second. This supports the supply-leading hypothesis in the intermediation link between financial sector development and economic growth in Rwanda, which suggests that the country can achieve significant economic growth if it reinforces incentives to attract businesses that can easily make use of the present financial services.

scholarly journals Examining the connection among national tourism expenditure and economic growth in Algeria

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Salah Eddine Sari Hassoun ◽  
Khayereddine Salim Adda ◽  
Asma Hadjira Sebbane
Keyword(s):  
Economic Growth ◽  
Structural Break ◽  
Unit Root Test ◽  
Vector Autoregressive ◽  
Natural Logarithm ◽  
Tourism Sector ◽  
Strategic Role ◽  
Short Run ◽  
Per Capita ◽  
Tourism Expenditure

AbstractTourism is one of the most important sectors for several researchers and decision makers, due to its influence on the world economic growth in the twenty-first century, making it as a source of competition between countries to a global industry for its effective strategic role in the development of countries. In this paper, we used two variables natural logarithm of per capita gross domestic product (GDP) and natural logarithm of per capita international and national tourism expenditure (ITE) to study the relationship between the tourism sector and economic growth in Algeria over the period of 1995–2017. We established with the unit root test with and without breakpoint that the variables are stationary in the first difference and there is a structural break in (ITE) and (GDP). Thus, with the presence of a breakpoint, we employed the methodology of Gregory–Hansen to avoid such issue, but we found that there was no evidence of cointegration with breakpoint, so then we used the vector autoregressive model (VAR). The model showed that the tourism sector has a positive and insignificant coefficient on the economic growth, while the economic growth factor has a positive and significant on the tourism sector. In the short run, there was a one-way causality from GDP to ITE at the level of 1%, confirming the economic-driven tourism growth hypothesis. Also, we found with Breitung and Candelon causality that there was same causality at the level of 10%.

scholarly journals Empirical Evidence from EU-28 Countries on Resilient Transport Infrastructure Systems and Sustainable Economic Growth

2018 ◽  
Vol 10 (8) ◽  
pp. 2900 ◽  
Author(s):  
Ştefan Gherghina ◽  
Mihaela Onofrei ◽  
Georgeta Vintilă ◽  
Daniel Armeanu
Keyword(s):  
Economic Growth ◽  
Carbon Dioxide ◽  
Carbon Dioxide Emissions ◽  
Air Pollutants ◽  
Causal Link ◽  
Transport Infrastructure ◽  
Railway Transport ◽  
Inland Waterways ◽  
Short Run ◽  
Sustainable Economic Growth

This paper examines the nexus between the main forms of transport, related investments, specific air pollutants, and sustainable economic growth. The research is important since transport may act as a facilitator of social, economic, and environmental development. Based on data retrieved from Eurostat, Organisation for Economic Co-operation and Development (OECD), and World Bank, the output of fixed-effects regressions for EU-28 countries over 1990–2016 reveals that road, inland waterways, maritime, and air transport infrastructure positively influence gross domestic product per capita (GDPC), though a negative link occurred in the case of railway transport. As concerning investments in transport infrastructure, the empirical results exhibit a positive impact on economic growth for every type of transport, except inland waterways. Besides, emissions of CO2 from all kind of transport, alongside other specific air pollutants, negatively influence GDPC. The fully modified and dynamic ordinary least squares panel estimation results reinforce the findings. Further, in the short-run, Granger causality based on panel vector error correction model pointed out a unidirectional causal link running from sustainable economic growth to inland waterways and maritime transport of goods, albeit a one-way causal link running from the volume of goods transported by air to GDPC. As well, the empirical results provide support one-way short-run links running from GDPC to investments in road and inland waterway transport infrastructure. In addition, a bidirectional short-run link occurred between carbon dioxide emissions from railway transport and GDPC, whereas unidirectional relations with economic growth were identified in the case of carbon dioxide emissions from road and domestic aviation. In the long-run, a bidirectional causal relation was noticed between the length of the railways lines, investments in railway transport infrastructure, and GDPC, as well as a two-way causal link between the gross weight of seaborne goods handled in ports and GDPC.

The Dynamics of Exports and Economic Growth: Assessing the Evidence from Nigeria

2018 ◽  
Vol 4 (1) ◽  
pp. 15-22
Author(s):  
Clement A.U. Ighodaro ◽  
Ovenseri-Ogbomo F. O.
Keyword(s):  
Economic Growth ◽  
Social Services ◽  
Time Series Data ◽  
Positive Impact ◽  
Capital Expenditure ◽  
Impulse Response Function ◽  
Series Data ◽  
Vector Autoregressive ◽  
Long Run ◽  
Short Run

The paper empirically examines the dynamics of exports and economic growth in Nigeria using time series data for 1970 to 2017. The Vector autoregressive model (VAR) was used to investigate the long run and short run relationship between exports and economic growth as well as some selected variables. The result shows that there exists a stable long run relationship among economic growth, exports, capital expenditure on education and social services. Also, the Granger causality results reveal that export Granger causes economic growth and not the other way round. This means that an increase in economic growth may result from increase in export, but increase in economic growth does not necessarily lead to increase in exports. The Impulse Response Function (IRF) shows that a one standard innovation in exports will lead to permanent positive impact on economic growth in Nigeria. This therefore supports the exports led growth hypothesis for Nigeria.

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

scholarly journals Causality Effects among Gross Capital Formation, Unemployment and Economic Growth in South Africa

Economies ◽  
2020 ◽  
Vol 8 (2) ◽  
pp. 26 ◽  
Author(s):  
Michael Takudzwa Pasara ◽  
Rufaro Garidzirai
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Inverse Relationship ◽  
Time Series Data ◽  
Capital Formation ◽  
Series Data ◽  
Vector Autoregressive ◽  
The Third ◽  
Short Run

Stagnant economic growth, decreasing investment and high unemployment remain consistent macroeconomic challenges for South Africa. Gross Capital formation (GCF) is designed to improve employment and economic growth (GDP). This study investigates the causality effects of the three variables using time series data from 1980 to 2018 in a Vector Autoregressive (VAR) framework. Results of the first model reveal a positive long-term relationship between gross capital formation GCF and economic growth GDP. Contrariwise, the first model indicates that unemployment (UNEMP) does not influence economic growth (GDP) in the short run. The second model results reveal a significant and positive relationship between UNEMP and GCF, while the third model shows an inverse relationship between GDP and UNEMP. Based on these findings, the study therefore recommends that fiscal authorities introduce expansionary fiscal policy that stimulates economic growth, investment and employment.

The Relevance of the Tourism-Led Growth Hypothesis to Malaysia

2017 ◽  
pp. 188-202 ◽  
Author(s):  
Chor Foon Tang ◽  
Eu Chye Tan
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Granger Causality Test ◽  
Developed Countries ◽  
Causality Test ◽  
Full Sample ◽  
Aggregated Data ◽  
Long Run ◽  
Short Run ◽  
Disaggregated Data

This paper explored whether the tourism-led growth (TLG) hypothesis is empirically relevant to Malaysia based upon both full sample and rolling sample analyses. Data from January 1995 to December 2010 have been utilised for the purpose. Instead of relying upon aggregated data of tourist arrivals, disaggregated data of arrivals from 12 major tourism markets are relied upon for more insightful and accurate findings. The empirical results suggest that there was cointegration between Malaysia's economic growth and tourist arrivals from these tourism markets. However, the results of the full sample Granger causality test indicate that only 2 out of 12 tourism markets contributed to economic growth in the short-run. The TLG hypothesis is only supported in the long run by tourist arrivals from 10 out of the 12 tourism markets. The rolling-based Granger causality test shows that it is also these 10 markets situated mostly in developed countries that could provide a stable support for the TLG hypothesis.

Monetary Policy Disturbance in India: The Relationships Among Money, Output and Prices

2019 ◽  
Vol 67 (3-4) ◽  
pp. 246-257
Author(s):  
Apica Sharma ◽  
Ibrahim Nurudeen
Keyword(s):  
Monetary Policy ◽  
Money Supply ◽  
Positive Impact ◽  
Consumer Price Index ◽  
Output Growth ◽  
Continuous Increase ◽  
Vector Autoregressive ◽  
Short Run ◽  
Two Measures ◽  
Monetary Policy Shock

The study examines the relationships among money supply, output and prices. Quarterly data were sourced from the Federal Reserve Bank of St. Louis, which spanned from 1996 Q2 to 2019 Q1. Four variables were included in the study: GDP, inflation (Consumer Price Index [CPI]) and two measures of money supply (M1 and M3). The findings of the study reveal that money supply is correlated with India’s output as well as inflation. Johansen’s test of co-integration reveals the existence of a long-term relationship among the variables. Another striking finding of this study is that neither M1 nor M3 could cause output (GDP) in the short run, but both Granger-cause inflation in the short run, which may be attributed to the output growth capacity limit of the country. The monetary policy disturbance in relation to other variables was examined through a structural vector autoregressive (SVAR) model that indicates that the two measures of money supply exert a positive impact on GDP. Similarly, the finding also shows that a monetary policy shock from the two measures of money supply causes a positive and continuous increase in inflation in India. Thus, money supply measure M3 is a potential indicator of movement in India’s output; hence the monetary authority should be mindful of inflation while targeting output expansion through money supply.

Economic Growth, Environmental Scarcity, and Conflict

2002 ◽  
Vol 2 (1) ◽  
pp. 83-110 ◽  
Author(s):  
Rafael Reuveny
Keyword(s):  
Economic Growth ◽  
Natural Resources ◽  
Developed Countries ◽  
Environmental Conflict ◽  
Armed Conflicts ◽  
Political Crisis ◽  
The People ◽  
Short Run ◽  
Environmental Scarcity ◽  
Conventional Solution

The global population is expected to reach nine billion by 2050, intensifying “environmental scarcity,” a term used here to denote environmental degradation and pressure on renewable and nonrenewable natural resources. Currently, environmental scarcity is more pronounced in less developed countries (LDCs) than in developed countries (DCs). Many argue that this scarcity is increasingly promoting armed conflicts in LDCs. The conventional solution to the problem of environmental conflict is economic growth. It is argued that as LDCs' income per capita rises to the level ofthat of DCs, their population growth and environ mental scarcity will decline, preventing conflict and building peace. This paper illustrates that the growth approach to conflict prevention probably will not work because the biosphere most likely would not be able to support a DC-level standard of living for all the people on Earth, at least not at the current state of technology. The resulting intensification of pressures on natural resources is likely to induce more, not less, environmental conflict. Still, economic growth in LDCs is important on both moral and practical grounds. One could make economic growth in LDCs ecologically—and therefore politically—feasible by balancing it with a coordinated economic contraction in DCs. The difficulties associated with implementing this approach are discussed. I believe that the approach will probably be rejected by DCs in the short run, but might eventually be initiated in response to some global ecological-social-political crisis. The problem is that such a crisis also might result in extensive damages. Whether or not such damages could be alleviated would depend on the nature ofthe crisis and the extent of the damages up to that point.

scholarly journals The role of personal income tax reforms in the transition to a democratic and egalitarian Egypt

2012 ◽  
Vol 9 (2) ◽  
pp. 385-399
Author(s):  
Monal A. Abdel-Baki ◽  
Nirmala Dorasamy
Keyword(s):  
Income Tax ◽  
Personal Income ◽  
Personal Income Tax ◽  
Long Term Effects ◽  
Important Lesson ◽  
Tax Reforms ◽  
Vector Autoregressive ◽  
Short Run ◽  
Structural Vector Autoregressive Model

The efficacy of the 2005-Personal Income Tax (PIT) reform in enhancing the macroeconomic performance in Egypt is tested using a structural vector autoregressive model. The results reveal that PIT reforms have successfully generated jobs and accelerated GDP growth. The reforms may cause mild inflation in the short-run, but their long-term effects are non-inflationary. This is the first effort to assess the PIT reforms in Egypt, with the aim of helping the new government to assess preceding policies and pursue the successful ones. The research is also an important lesson for the leaders of emerging economies encountering similar circumstances to enact reforms and to perpetuate economic growth and sociopolitical stability.

The Growth Effects of Financial Development Over Economic Cycle in South Africa

2021 ◽  
pp. 109-125
Author(s):  
Naser Yenus Nuru ◽  
Hayelom Yrgaw Gereziher
Keyword(s):  
South Africa ◽  
Standard Deviation ◽  
Financial Development ◽  
Open Economy ◽  
Output Growth ◽  
Impulse Response Functions ◽  
Vector Autoregressive ◽  
Local Projection ◽  
Domestic Credit ◽  
Short Run

This study examines the effects of financial development, proxied by domestic credit, on growth for South Africa across the states of the economy over the sample period 1970Q1-2019Q3. To address this point, the authors use Jorda's local projection method to generate impulse response functions for this small developing open economy. The shocks, however, are identified by applying short-run contemporaneous restrictions in a vector autoregressive model based on Cholesky identification scheme. The states of the economy are determined by a threshold variable, namely output growth. The results indicate that one standard deviation shock in domestic credit leads to a significant increment in output in this economy. This effect, though, is a bit pronounced in recession than the expansion state. One standard deviation shock in domestic credit leads to around 0.8 and 0.5% increment in output in recession and expansion states at the fourth quarter and on impact, respectively. The results are also robust to an alternative proxy variable of financial development.

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