scholarly journals Inflation dynamics analysis in selected MENA countries

2018 ◽  
Vol 6 (2) ◽  
pp. 160-168
Author(s):  
Tarek Kacemi ◽  
Sallahuddin Hassan
Keyword(s):  
Phillips Curve ◽  
Least Square ◽  
New Keynesian ◽  
Estimation Methods ◽  
Mena Countries ◽  
Ordinary Least Square ◽  
Pooled Mean Group ◽  
Long Run ◽  
Short Run ◽  
The Empirical Analysis

The current paper analyses the new Keynesian Phillips curve (NKPC) in the context of selected MENA countries over the 1990-2016 period. This study has used Pooled Mean Group (PMG) and Fully Modified Ordinary Least Square (FMOLS) estimation methods for the empirical analysis. For the dynamic heterogeneous panels, PMG developed by Pesaran et al. (1999) is the most suitable technique. The outcomes by FMOLS asserted that inflation and unemployment are unrelated in the long run, corroborating the long run Philips Curve theory. While, the empirical outcomes obtained by PMG indicate negative linkage between unemployment and inflation in the long run. Nevertheless, the notion of the tradeoff between the inflation and unemployment that expressed by a short-run Phillips curve is not observed in the selected MENA countries. The findings of this study corroborate the hybrid version of NKPC. Moreover, it establishes of the study suggest that the dynamic inflation can be used as a HNKPC model for understanding the inflation behavior in selected MENA countries.

scholarly journals Impact of Exchange Rate Management on the Nigerian Economic Growth: Empirical Validation

2019 ◽  
Vol 1 (2) ◽  
pp. 28-35
Author(s):  
Friday Osaru Ovenseri Ogbomo ◽  
Precious Imuwahen Ajoonu
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Inflation Rate ◽  
Government Expenditure ◽  
Least Square ◽  
Ordinary Least Square ◽  
Exchange Rate Management ◽  
Long Run ◽  
Short Run ◽  
The Impact

This paper examined the impact of Exchange Rate Management on economic growth in Nigeria between 1980 and 2015. The study was set to gauge how the management of exchange rate in Nigeria has impacted the economy. The study employed the Ordinary Least Square (OLS) method in its analysis. Co-integration and Error Correction Techniques were used to establish the Short-run and Long-run relationships between economic growth and other relevant economic indicators. The result revealed that exchange rate management proxy by various exchange rates regimes in Nigeria was not germane to economic growth. Rather, government expenditure, inflation rate, money supply and foreign direct investment significantly impact on economic growth in Nigeria. It is against this backdrop that the Nigerian economy must diversify her export base to create room for more inflow of foreign exchange.  

scholarly journals BANK CONCENTRATION AND NON-PERFORMING LOANS IN CENTRAL AND EASTERN EUROPEAN COUNTRIES

2014 ◽  
Vol 16 (1) ◽  
pp. 117-137 ◽  
Author(s):  
Atilla Çifter
Keyword(s):  
Least Square ◽  
Eastern European ◽  
Data Set ◽  
Ordinary Least Square ◽  
Long Run ◽  
Additional Control ◽  
Short Run ◽  
Generalised Method Of Moments ◽  
Eastern European Countries ◽  
Bank Concentration

This paper examines the effect of bank concentration on the non-performing loans (NPLs) for ten Central and Eastern European (CEE) countries. The short-run effect of bank concentration is tested with the generalised method of moments system and the instrumental variable approaches, and the long-run effect is tested with the fully modified ordinary least square (FMOLS) approach. The empirical analysis shows that the bank concentration is an insignificant factor on the NPLs, either in the short or in the long-run of the panel data set. On the other hand, individual FMOLS results reveal that the bank concentration reduces the NPLs in Estonia, Latvia, and Slovakia, and increases the NPLs in Bulgaria, Croatia, Lithuania, Poland, and Slovenia in the long-run. According to this evidence, the bank concentration does not reduce the credit risk for all of the CEE countries. Therefore, bank concentration may not affect systemic stability in the CEE countries. These findings are also robust in controlling several factors, including additional control variables. As a result, the relationship between the bank concentration and the NPLs, in regards to the CEE countries, is ambiguous.

Information and communication technologies and economic development in Africa in the short and long run

2019 ◽  
Vol 18 (2) ◽  
pp. 127-146 ◽  
Author(s):  
Olaniyi Evans
Keyword(s):  
Economic Development ◽  
Information And Communication Technologies ◽  
Communication Technologies ◽  
Least Square ◽  
Cross Sectional ◽  
Ordinary Least Square ◽  
Positive Effects ◽  
Long Run ◽  
Short Run ◽  
Information And Communication

This study investigates the relationship between information and communication technologies (ICTs) and economic development in Africa for the period 2001–15 using Fully Modified Ordinary Least Square (FMOLS) and panel Granger analysis, which accounts for cross-sectional dependence. The empirical results show that ICTs have significant positive effects on economic development. Similarly, the results show that ICTs lead to economic development and economic development also leads to greater investment in ICTs both in the short and in the long run. ICTs therefore play significant roles in economic development and in turn economic development plays significant roles in the expansion of ICTs in Africa both in the short and in the long run. The study concludes that the rapid growth of mobile telephony and Internet penetration in Africa can be used to promote the needed economic development in the continent not only in the short run but also in the long run.

scholarly journals Pricing Under Fairness Concerns

2020 ◽  
Author(s):  
Erik Eyster ◽  
Kristóf Madarász ◽  
Pascal Michaillat
Keyword(s):  
Phillips Curve ◽  
New Keynesian ◽  
Technology Shocks ◽  
Impulse Responses ◽  
Price Increases ◽  
Keynesian Model ◽  
Long Run ◽  
Short Run ◽  
Fairness Concerns ◽  
Perceived Unfairness

Abstract This paper proposes a theory of pricing premised upon the assumptions that customers dislike unfair prices—those marked up steeply over cost—and that firms take these concerns into account when setting prices. Because they do not observe firms’ costs, customers must extract costs from prices. The theory assumes that customers infer less than rationally: When a price rises due to a cost increase, customers partially misattribute the higher price to a higher markup—which they find unfair. Firms anticipate this response and trim their price increases, which drives the passthrough of costs into prices below one: Prices are somewhat rigid. Embedded in a New Keynesian model as a replacement for the usual pricing frictions, our theory produces monetary nonneutrality: When monetary policy loosens and inflation rises, customers misperceive markups as higher and feel unfairly treated; firms mitigate this perceived unfairness by reducing their markups; in general equilibrium, employment rises. The theory also features a hybrid short-run Phillips curve, realistic impulse responses of output and employment to monetary and technology shocks, and an upward-sloping long-run Phillips curve.

scholarly journals Energy consumption and economic growth in Nigeria

2019 ◽  
Vol 1 (2) ◽  
pp. 01-09
Author(s):  
Emeka Nkoro ◽  
Nenubari Nenubari Ikue-John ◽  
God’sgrace I. Joshua
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Energy Consumption ◽  
Least Square ◽  
Electricity Production ◽  
Ordinary Least Square ◽  
Long Run ◽  
Production And Distribution ◽  
Short Run ◽  
The Impact

This paper investigated this disparity in the literature using Nigeria data from 1980 to 2016. In doing this, energy consumption was disaggregated, and their impacts on economic growth investigated using a modified Ordinary Least Square technique which allows for time gaps in the model. It was observed that only renewable energy impacted on economic growth in the long-run whereas non-renewable energy component impacted on economic growth in the short-run. Therefore, the study sees the impact of energy consumption on economic growth to be indistinct in Nigeria within the period under review. This further buttresses the need for improvement in electricity production and distribution in Nigeria. Given the importance of energy consumption on productivity, the study, therefore, suggests policies/measures that will bring about increasing the supply or improvement of energy production in the country.

scholarly journals Is Inflation Regressive or Progressive? Long Run & Short Run Evidence from Pakistan

2010 ◽  
Author(s):  
Muhammad Shahbaz ◽  
Abu N. M. Wahid ◽  
Rukhsana Kalim
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
Time Series Data ◽  
Least Square ◽  
Series Data ◽  
Advanced Technique ◽  
Ordinary Least Square ◽  
Long Run ◽  
Non Linear ◽  
Short Run

The present paper investigates an answer to a key question “is inflation regressive or progressive?” by utilizing time series data from 1971 up to 2005 with reference to Pakistan. The main focus of the study is on the inflation-inequality puzzle but other control variables are also included in the model that affect income distribution. We have utilized the most advanced technique FMOLS (Fully-Modified Ordinary Least Square) for long run and ECM (Error Correction Model) for short run dynamics. Our findings suggest that inflation is progressive in the case of Pakistan but with low magnitude. There is also a prevalence of a U-shaped relationship between inflation and income inequality in non-linear or non-monotonic phenomenon, but it is insignificant. Per capita income deteriorates income distribution, and seems to provide gains to non-poor individuals in the economy. Remittances as share of GDP, and human capital, also appear to increase income inequality in both periods but large size of the government seems to worsen income distribution in the long run. International trade and income inequality are positively correlated that confirms the existence of Leontief paradox in Pakistan not only in short run, but also in long run. Financial development declines income inequality insignificantly. Inverted U-shaped curve (Lafer-Curve) indicates an association of trade and income inequality in non-linear fashion insignificantly. This effort provides some new insights for policy makers and development planners in Pakistan.   Keywords: Inflation; inequality; fully modifed ordinary least square; Pakistan.  

scholarly journals Does Monetary Policy Affect Economic Growth in Jordan? Evidence from Ordinary Least Square Models

2018 ◽  
Vol 12 (1) ◽  
pp. 27
Author(s):  
Mohamed Ibrahim Mugableh
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Positive Impact ◽  
Least Square ◽  
Vector Error Correction ◽  
Ordinary Least Square ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run

The main objective of this paper is to analyze equilibrium and dynamic causality relationships between monetary policy tools and economic growth in Jordan for the period (1990-2017). For this purpose, it considers the autoregressive distributed lag (ARDL) and vector error correction (VEC) models estimations. The results of ARDL approach show that monetary policy variables (i.e., real interest rate and money supply) have positive impact on economic growth in long-run and short-run except inflation rate. In addition, the results of VECM indicate bidirectional causal relationships between economic growth and monetary policy variables in long-run and short-run.

Effect of Economic Growth on Unemployment and Validity of Okun’s Law in Mauritius

2020 ◽  
Vol 12 (2) ◽  
pp. 231-250
Author(s):  
Usha Devi Chuttoo
Keyword(s):  
Economic Growth ◽  
Least Square ◽  
Okun’S Law ◽  
Okun's Law ◽  
Ordinary Least Square ◽  
Distributed Lag ◽  
Long Run ◽  
Gdp Growth Rate ◽  
Short Run ◽  
Small Economy

This study examines the relationship between unemployment and economic growth in Mauritius. The methodology adopted for this study is the autoregressive distributed lag (ARDL) bounds cointegration test, ARDL error-correction model (ARDL-ECM) using the ordinary least square (OLS) approach and Okun’s law-gap version. ARDL-ECM estimates the long-run and short-run relationship between economic growth and unemployment. The validity of Okun’s law is tested in the Mauritian context and Okun’s coefficient is thereby estimated. The results obtained from the tests show that both in the long run and short run, there is a negative cointegration between economic growth and unemployment, but it is not statistically significant. Whereas, the result of Okun’s law-gap version shows that Okun’s law is indeed valid in the small economy of Mauritius. From the Okun’s coefficient obtained, it is concluded that 4 percent change in gross domestic product (GDP) growth rate changes unemployment rate by 1 percent in the opposite direction in Mauritius.

The Relationship Between Inflation and Unemployment in Namibia Within the Framework of the Phillips Curve

2021 ◽  
Vol 7 (5) ◽  
pp. 7-16
Author(s):  
Johanna Pangeiko Nautwima ◽  
Asa Romeo Asa
Keyword(s):  
Causal Relationship ◽  
Phillips Curve ◽  
Time Series Data ◽  
Policy Formulation ◽  
Least Square ◽  
Series Data ◽  
Causality Test ◽  
Long Run ◽  
Short Run ◽  
The Relationship

This study intended to empirically validate the applicability of the Phillips Curve in Namibia since independence, using semi-annual time series data, and taking into account the periods of the annus horribilis of the global financial crises and the Coronavirus Disease pandemic. It further sought to examine the nature of the relationship between inflation and unemployment to determine whether it is short-run or long-run and establish the causal relationship between the variables using various econometric analyses. The unit root tests indicate that the variables were stationary in their level forms, implying the absence of the long-run relationship. Hence, the Ordinary Least Square (OLS) model was performed to measure the short-run relationship between the variables. Results from the OLS analysis reveal a bidirectional nexus between inflation and unemployment, validating the presence of the Phillips Curve in the Namibian economy. These results correspond to the findings that incorporated the periods of economic shocks; thus, adjudging the critics of the Philips Curve regarding the consideration of economic shockwaves to be nonsensical in the Namibian economy. Finally, Granger causality test was conducted to establish the causal relationship between the variables, and results found inflation and unemployment to be unrelated. Based on these findings, the study recommends policymakers to adopt a policy mix, skewed to reducing unemployment predominately among the youth since the issues cannot be addressed simultaneously. Lastly, the study suggests future investigations to assess panel analyses on the phenomenon concerning developing countries, particularly those in the same region. It also recommends a significant focus on the determinants of inflation and unemployment since the variables were found to be independent of each other. This will give accurate directives to policymakers in an attempt to address the matter in terms of policy formulation and assimilation when they understand where the issue is deriving from.

Does dollarization reduce or produce inflation?

2015 ◽  
Vol 42 (3) ◽  
pp. 358-376 ◽  
Author(s):  
Lula G. Mengesha ◽  
Mark J. Holmes
Keyword(s):  
Least Square ◽  
Market Exchange ◽  
Content Type ◽  
Vector Error Correction ◽  
Ordinary Least Square ◽  
Long Run ◽  
Short Run ◽  
Market Exchange Rate ◽  
The Impact ◽  
Partial Dollarization

Purpose – The purpose of this paper is to address the unresolved outcome of the research on the impact of dollarization on inflation by examining the partially dollarized economy of Eritrea. Design/methodology/approach – Inflation under partial dollarization is modelled based on money demand and supply framework. Using quarterly data for the study period 1996Q1-2008Q4, estimation is based on a vector error correction model together with dynamic ordinary least square. Findings – The results indicate that inflation increases as a result of an increase in dollarization. This applies to both the short-run and long-run estimations regardless of whether official or black market exchange rate data are used in the analysis. In terms of the short-run dynamics involved in the long-run relationship between dollarization and inflation, the speed of adjustment toward long-run equilibrium ranges from negative 7.2-7.6 percent per quarter. Research limitations/implications – The main policy implication of the finding is that the extent of dollarization should not be overlooked in controlling inflation in the short run and the long run. Originality/value – Despite a number of studies that examine the consequences of dollarization, the impact of partial dollarization on inflation in the Eritrean economy has never been addressed. This study, therefore, is original in its kind and resolves the controversial outcomes on the studies of inflation and dollarization by modelling inflation under partial dollarization, providing new evidence and revealing potential economic reasons for the discrepancies in the findings of the literature on partial dollarization.

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