Coordination or Dominance of Fiscal and Monetary Policy in Egypt

This study investigates to what extent of coordination between the fiscal and monetary policies in Egypt in the period 1980-2017, it has been adopted in its methodology on the vector error correction and Granger causality test. It concludes that there is a significant relation between money supply and budget deficit on one hand and inflation on the other hand, and that fiscal policy is dominant in monetary policy, as a change of 10% of the budget deficit results in an increase in the inflation rate of 8.1%. As for the Granger causality test. Thus stresses the existence of causal relationship to one direction of inflation against both the budget deficit and the money supply, which affects the budget deficit in the second slowdown. Then it feeds the budget deficit and inflation in the third year, which in turn feeds the budget deficit in the fourth year and the causal relationship between inflation and money supply has concluded that there is a one-way causal relationship of money supply to inflation after four slows and then inflation affects the money supply from the fifth to the tenth slowdown. As for the relationship of the budget deficit to money supply, there may be a one-way causal relationship between the budget deficit and the money supply from the second to the tenth year, except the third year, which also confirms the dominance of fiscal policy on monetary policy in Egypt in the period under consideration.

Download Full-text

Fiscal Policy, Monetary Policy and Price Volatility: Evidence from an Emerging Economy

Organizations and Markets in Emerging Economies ◽

10.15388/omee.2021.12.47 ◽

2021 ◽

Vol 12 (1) ◽

pp. 57-70

Author(s):

Le Thanh Tung

Keyword(s):

Monetary Policy ◽

Fiscal Policy ◽

Granger Causality ◽

Impulse Response Function ◽

Price Volatility ◽

Granger Causality Test ◽

Causality Test ◽

Study Results ◽

The Government ◽

The Impact

Vietnam is an Asian emerging country, which now is ranked in the group of the fastest-gro- wing economies worldwide. However, this economy has faced galloping inflation in recent years. So the Vietnamese experience is a valuable reference for the policymakers in the developing world in order to successfully control price volatility. Our study applies the Vector autoregressive method, the Johansen cointegration test, and the Granger causality test to examine the impact of fiscal and monetary policy on price volatility in Vietnam with a quarterly data sample collected over the period from 2004 to 2018. The study results confirm the existence of a long-term cointegration relationship between these policies and price volatility in Vietnam. Besides, the variance decomposition and impulse response function also show that the impact of these policies on inflation is clear, however, the fiscal policy more strongly affects inflation than the monetary policy. Finally, the Granger causality test also indicates one-way causality relationships from the government expenditure as well as the exchange rate to price volatility in the study period.

Download Full-text

The causal relationship between government revenue and expenditure in Namibia

Journal of Economic and Financial Sciences ◽

10.4102/jef.v2i2.353 ◽

2008 ◽

Vol 2 (2) ◽

pp. 175-186 ◽

Cited By ~ 5

Author(s):

Joel H. Eita ◽

Daisy Mbazima

Keyword(s):

Causal Relationship ◽

Granger Causality ◽

Budget Deficit ◽

Vector Autoregression ◽

Government Expenditure ◽

Granger Causality Test ◽

Government Revenue ◽

Causality Test ◽

The Relationship

The relationship between government revenue and government expenditure is important, given its relevance for policy especially with respect to the budget deficit. The purpose of this paper is to investigate the relationship between government revenue and government expenditure in Namibia. It investigates the causal relationship between government revenue and government expenditure using the Granger causality test through cointegrated vector autoregression (VAR) methods for the period the period 1977 to 2007. The paper tests whether government revenue causes government expenditure or whether the causality runs from government expenditure to government revenue, and if there is bi-directional causality. The results show that there is unidirectional causality from government revenue to government expenditure. This suggests that unsustainable fiscal imbalances can be mitigated by policies that stimulate government revenue.

Download Full-text

The Dynamic Iinterrelationships Between Fiscal and Monetary Policies in Jordan

Journal of Economics, Finance and Management Studies ◽

10.47191/jefms/v4-i12-20 ◽

2021 ◽

Vol 04 (12) ◽

Author(s):

Jumah Ahmad Alzyadat ◽

Keyword(s):

Monetary Policy ◽

Fiscal Policy ◽

Interest Rates ◽

Causal Relationship ◽

Money Supply ◽

Impulse Response Function ◽

Decomposition Analysis ◽

Government Expenditures ◽

Causality Test ◽

Tax Revenues

This study aims to answer the question: What is the nature of the relationship between fiscal and monetary policy in Jordan? Are the two policies complementary to each other, alternatives, or go in opposite directions?. This study applies the vector autoregression VAR, the Impulse Response Function test, the Granger Causality test, and the. Variance Decomposition Analysis. The results showed that there is a bidirectional causal relationship between government expenditures and money supply, as well as a bidirectional causal relationship between tax revenues and money supply, the main conclusion that the fiscal policy through the use of government expenditures and tax revenues and the monetary policy through the money supply go in the same direction, and complement each other, this is supported by the fact that the expansionary fiscal policy in Jordan during the study period was also accompanied by an expansionary monetary policy. The monetary authority sets interest rates on loans and there is no significant role for fiscal policy instruments in influencing the interest rate in Jordan. The study recommends harmonization between the declared and implemented policy. Each authority should serve its goals with independence and complementarity between the two policies. In this case, coordination means preventing extremism in pursuing an expansionary or contractionary policy from this or that authority, what is required is that the Central Bank and the Ministry of Finance agree on coordination, integration and balance between objectives.

Download Full-text

Fiscal Policy, Monetary Policy and Price Volatility: Evidence from an Emerging Economy

10.31219/osf.io/7u56v ◽

2022 ◽

Author(s):

Le Thanh Tung

Keyword(s):

Monetary Policy ◽

Fiscal Policy ◽

Granger Causality ◽

Impulse Response Function ◽

Price Volatility ◽

Granger Causality Test ◽

Causality Test ◽

Study Results ◽

The Government ◽

The Impact

Vietnam is an Asian emerging country, which now is ranked in the group of the fastest-gro-wing economies worldwide. However, this economy has faced galloping inflation in recent years. So the Vietnamese experience is a valuable reference for the policymakers in the developing world in order to successfully control price volatility. Our study applies the Vector autoregressive method, the Johansen cointegration test, and the Granger causality test to examine the impact of fiscal and monetary policy on price volatility in Vietnam with a quarterly data sample collected over the period from 2004 to 2018. The study results confirm the existence of a long-term cointegration relationship between these policies and price volatility in Vietnam. Besides, the variance decomposition and impulse response function also show that the impact of these policies on inflation is clear, however, the fiscal policy more strongly affects inflation than the monetary policy. Finally, the Granger causality test also indicates one-way causality relationships from the government expenditure as well as the exchange rate to price volatility in the study period.

Download Full-text

Dynamic linkage between nifty-fifty and sectorial indices of national stock exchange

American Journal of Economics and Business Management ◽

10.31150/ajebm.v3i2.148 ◽

2020 ◽

Vol 3 (2) ◽

pp. 17-27

Author(s):

Kamaljit Singh ◽

Vinod Kumar

Keyword(s):

Causal Relationship ◽

Granger Causality ◽

Unit Root ◽

Service Sector ◽

Banking Sector ◽

Stock Exchange ◽

Unit Root Test ◽

Granger Causality Test ◽

Financial Service ◽

Causality Test

The main objective of this paper is to analyze the trend and pattern of the Nifty-Fifty and sectorial indices. An attempt has been also made to find out the causal relationship among the Nifty-Fifty and NSE sectorial Indices. The unit root test and Granger-causality test has been applied to check the causal relationship between Nifty-Fifty and sectorial indices. The finding of the study shows that the financial service sector had performed better and followed by the banking sector among all the indices while the Pharma sector and the Realty sector were Under-performed in comparison to other indices. The Nifty-Fifty has been found less volatile in comparison to other sectorial indices however Realty sector indices show the highest volatility during the study period.

Download Full-text

Do Fiscal Rules Constrain Fiscal Policy in Romania?

KnE Social Sciences ◽

10.18502/kss.v4i1.5975 ◽

2020 ◽

Author(s):

Alina Daniela Vodă ◽

Gabriela Dobrotă ◽

Loredana Andreea Cristea ◽

Bianca Ciocanea

Keyword(s):

Sustainable Development ◽

Fiscal Policy ◽

Granger Causality ◽

National Level ◽

Granger Causality Test ◽

Business Environment ◽

Economic Life ◽

Fiscal Sustainability ◽

Fiscal Rules ◽

Causality Test

At both macroeconomic and national level, in recent decades, European tax policies have shown a particular interest in addressing the spectrum of risk issues in terms of maturing the business environment and the lack of sustainable development of the economy. In Romania there has been a significant increase in public debt, which is increasingly threatening fiscal sustainability. This is due to fiscal rules that restrict the applicability of fiscal policy to balancing the national economy. However, fiscal policy did not act in the direction of economic recovery during the crisis that started in the last quarter of 2008, which had a negative impact on the Romanian business environment. Objectively, fiscal policy should manifest itself as a general framework of the economy on the basis of which to develop fiscal rules that act in the direction of sustainable development of the business environment and implicitly, of socio-economic life. The research carried out referred to identify how fiscal rules in Romania restrict the application of fiscal policy as well as whether there is an explicit concordance between them. The research methodology aimed to use the ARDL model to apply the Granger causality test, using quarterly data for a set of four indicators, being identified that Romanian fiscal rules restrict fiscal policy. The achieved results highlighted the fact that fiscal rules restrict fiscal policy, being identified a long-run relationship between the analyzed variables and implicitly, a state of instability of the fiscal system in Romania. Keywords: fiscal policy, autoregressive distributed-lagged model, Granger causality test.

Download Full-text

ODA and Provincial Economic Growth in Vietnam

International Finance and Banking ◽

10.5296/ifb.v6i1.14311 ◽

2019 ◽

Vol 6 (1) ◽

pp. 1

Author(s):

Dang Ngoc Duc ◽

Do Thi Ngoc Lan

Keyword(s):

Economic Growth ◽

Panel Data ◽

Empirical Evidence ◽

Case Studies ◽

Causal Relationship ◽

Granger Causality ◽

Focal Point ◽

Causal Effect ◽

Granger Causality Test ◽

Causality Test

The focal point of this paper is focused on assessing the causal relationship between ODA and economic growth in the localities of Vietnam. This research uses panel data of ODA and GDP from 63 provinces of Vietnam by using Granger Causality test. The results showed that ODA has a causal effect on economic growth (GDP) and vice versa, economic growth decides to attract ODA in provinces in Vietnam. This result complements studies on the causal relationship between ODA and economic growth using new empirical evidence through case studies in the provinces of Vietnam.

Download Full-text

The relationship between energy consumption and gross domestic product in Hong Kong (1992–2015): Evidence from sectoral analysis and implications on future energy policy

Energy & Environment ◽

10.1177/0958305x19854542 ◽

2019 ◽

Vol 31 (2) ◽

pp. 215-236

Author(s):

Ruixiaoxiao Zhang ◽

Geoffrey QP Shen ◽

Meng Ni ◽

Johnny Wong

Keyword(s):

Time Series ◽

Energy Consumption ◽

Gross Domestic Product ◽

Causal Relationship ◽

Granger Causality ◽

Value Added ◽

Granger Causality Test ◽

Domestic Product ◽

Causality Test ◽

Per Capita

The causal relationship between energy consumption and gross domestic product in Hong Kong from 1992 to 2015 is investigated in this study. Different from the previous studies focusing on the causal relationship between total energy consumption and total gross domestic product per capita, this study further investigates the causal relationship from sectoral perspective, including residential, commercial, industrial and transportation sectors. For each sector, the time series data of sectoral energy consumption and sectoral per capita value added are collected. To conduct the Granger causality test, the unit root test is first applied to analyse the stationarity of time series. The cointegration test is then employed to examine whether causal relationship exists in long-term. Finally, based on the aforementioned tests, both vector error correction model and vector autoregression model can be selected to determine the Granger causality between time series. It is interesting to find that the sectoral energy consumption and corresponding sectoral per capita value-added exhibit quite different causal relationships. For both residential sector and commercial sectors, a unidirectional causal relationship is found running from the sectoral per capita value added to sectoral energy consumption. Oppositely, for industrial sector and transportation sector, a unidirectional causal relationship is found running from sectoral energy consumption to sectoral per capita value added. Regarding the Granger causality test results, the indicative suggestions on energy conservation policies, energy efficiency policies and greenhouse gas emission reduction policies are discussed based on the background of Hong Kong’s economic structure and fuel types.

Download Full-text