HEALTH, AGRICULTURAL EXPENDITURE AND ECONOMIC GROWTH IN NIGERIA: ARDL AND ECM APPROACH

2019 ◽  
Vol 10 (2) ◽  
pp. 127-152
Author(s):  
Olayemi Henry Omotayo ◽  
Aderemi Timothy Ayomitunde ◽  
Adeagbo Olayinka Afolakemi ◽  
Olajide Olufunmilayo Aromoke
Keyword(s):  
Economic Growth ◽  
Unit Root ◽  
Health Expenditure ◽  
Negative Relationship ◽  
Equilibrium Path ◽  
Order Zero ◽  
Correction Model ◽  
Long Run ◽  
Significant Negative Relationship ◽  
Short Run

This study examines the short run and long relationship between agricultural expenditure, health expenditure and economic growth in Nigeria. This study was motivated due to the lack of sufficient studies regarding this subject matter in recent times. Consequently, Data were collected from CBN Statistical Bulletin from 1981 to 2016. Relevant pre-estimation tests such as unit root and Bound tests were carried out because all the study variables were integrated of order zero and one. Estimated results from ARDL and ECM models established the existence of a short-run and long-run relationship between the variables of interest in Nigeria. While the error correction model reveals that about 19 percent of total disequilibrium due to external shock in the previous year is corrected in the current year. Therefore, it will take about five (5) years for the system to adjust back to its long-run equilibrium path. Results further showed that there is a significant positive relationship between agricultural expenditure and economic growth in Nigeria. However, there is a significant negative relationship between health expenditure and economic growth in the long run. Finally, policymakers in Nigeria should allocate substantial budget towards health and agricultural sectors in Nigeria.

ANALISIS PENGARUH EKSPOR TERHADAP PERTUMBUHAN EKONOMI INDONESIA

2017 ◽  
Vol 11 (1) ◽  
pp. 1-20
Author(s):  
Ari Mulianta Ginting
Keyword(s):  
Economic Growth ◽  
Export Performance ◽  
Descriptive Analysis ◽  
Correction Model ◽  
Administration System ◽  
Long Run ◽  
Short Run ◽  
Available Information ◽  
Increasing Trends ◽  
The Relationship

Ekspor merupakan salah satu faktor terjadinya peningkatan pertumbuhan ekonomi suatu negara, sejalan dengan hipotesis export-led growth (ELG). Penelitian ini menganalisis perkembangan ekspor dan pertumbuhan ekonomi Indonesia periode kuartal I 2001 sampai dengan kuartal IV 2015. Penelitian ini menggunakan analisis deskriptif dalam menggambarkan perkembangan pertumbuhan ekonomi serta ekspor dan analisis kuantitatif metode Error Correction Model (ECM) dalam menganalisis efek jangka panjang dan jangka pendek dari ekspor terhadap pertumbuhan ekonomi. Pada periode penelitian, data yang ada menunjukkan bahwa ekspor dan pertumbuhan ekonomi Indonesia sama-sama mengalami peningkatan. Hasil regresi ECM menunjukkan bahwa ekspor memiliki pengaruh yang positif dan signifikan secara statistik terhadap pertumbuhan ekonomi Indonesia, yang mendukung hipotesis bahwa ELG berlaku untuk Indonesia. Berdasarkan hasil penelitian ini, maka untuk mendorong pertumbuhan ekonomi Indonesia diperlukan peningkatan kinerja ekspor Indonesia. Peningkatan kinerja ekspor Indonesia dapat dilakukan dengan berbagai cara, salah satunya adalah dengan perbaikan sistem administrasi ekspor, peningkatan riset dan pengembangan produk Indonesia, peningkatan sarana dan prasarana infrastruktur, stabilitas nilai tukar dan perluasan pasar non tradisional, termasuk perbaikan struktur ekspor komoditas. Export is one of the factors behind the economic growth which is in line with the export-led growth hypotesis (ELG). This research analyzes the relationship between economic growth and export of Indonesia during first quarter of 2001 until fourth quarter of 2015. It employs descriptive analysis to describe export movement and economic growth during the study period and ECM model to analyze the long run and the short run effects of export on the economic growth. The available information indicated that, during the study period, both export and economic growth showed similar increasing trends. The result of the ECM model revealed that export had a positive and statistically significant relationship with the economic growth, supporting the hypotesis of ELG in Indonesia. Hence, to accelerate economic growth, efforts are required to boost the export performance in Indonesia. The Export performance can be increased by several way, such as improving the export administration system, increasing the research and development of Indonesian products, improving the facilities and infrastructure, exchange rate stability and the non-tradisional markets expansion, and including improvement of the export commodity structure.

Enhancing Economic Growth and Government Revenue Generation in Nigeria: The Role of Diaspora Remittances

2021 ◽  
pp. 003464462110256
Author(s):  
Dal Didia ◽  
Suleiman Tahir
Keyword(s):  
Economic Growth ◽  
Parameter Estimates ◽  
Gross Domestic Product Growth ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Short Run ◽  
The Empirical Analysis

Even though remittances constitute the second-largest source of foreign exchange for Nigeria, with a $24 billion inflow in 2018, its impact on economic growth remains unclear. This study, therefore, examined the short-run and long-run impact of remittances on the economic growth of Nigeria using the vector error correction model. Utilizing World Bank data covering 1990–2018, the empirical analysis revealed that remittances hurt economic growth in the short run while having no impact on economic growth in the long run. Our parameter estimates indicate that a 1% increase in remittances would result in a 0.9% decrease in the gross domestic product growth rate in the short run. One policy implication of this study is that Nigeria needs to devise policies and interventions that minimize the emigration of skilled professionals rather than depending on remittances that do not offset the losses to the economy due to brain drain.

scholarly journals Analysis of Internal and External Determinant Variables towards Profitability of Islamic Banking in Indonesia (2014-2020)

2021 ◽  
Vol 4 (1) ◽  
pp. 18-34
Author(s):  
Febri Ramadhani ◽  
Muhammad Rizkan
Keyword(s):  
Negative Relationship ◽  
Banking System ◽  
Islamic Banking ◽  
Correction Model ◽  
Factors Affecting ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Short Run ◽  
Relationship Of

Indonesia is a country that adheres to a dual banking system, namely conventional and Islamic Banking. The growth rate of Islamic banking in the last three years is higher than conventional banking. However, in total assets, Islamic banking is still far behind conventional banking. Therefore, it is necessary to study further the performance of Islamic banking reflected in its profitability. So, it becomes an alternative input in determining Islamic banking policies. This study aims to know the factors affecting the profitability (ROA) of Islamic Banking in Indonesia. The data used are the 2014-2020 monthly data in the amount of 79 data. The method used in this study is a Vector Error Correction Model (VECM) to determine the effect of long-run and short-run relationships. The results of the study showed that the long-run relationship of the NPF variable affected and was significant positive toward ROA, CAR affected and was significant negative toward ROA, while the inflation variable had a negative relationship and not significant toward ROA. The results of the short-run relationships showed that the NPF and CAR variables positively affected ROA, while the inflation variable did not significantly affect the ROA.

scholarly journals Dynamic Relation Between Economic Growth, Stock Market Depth and Macroeconomic Variables of Bangladesh

2020 ◽  
Vol 13 (26) ◽  
pp. 45-63
Author(s):  
Mostafa ALI ◽  
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Causal Relation ◽  
Equilibrium Path ◽  
Vector Error Correction ◽  
Market Depth ◽  
Dynamic Relation ◽  
Long Run ◽  
Macroeconomic Indicators ◽  
Short Run

This study explores the dynamic relation between economic growth and stock market depth in the presence of three more macroeconomic indicators such as exchange rate, inflation and interest rate of Bangladesh. We use Johansen and Juselius (1990) test of co-integration and Vector Error Correction Model (VECM) to detect the possible short-run and long-run causal relation among the selected economic forces. The results of the study evidence that the lagged error-correct term of GDP (i.e., the proxy of economic growth) is found statistically significant in all three models. This manifest that GDP tends to converge to its long-run equilibrium path in response to changes in its regressors. But we find a complex network of causal linkage between the variables in the short-run. The findings of this study are of particular interest and importance to policymakers, financial managers, financial analysts and investors dealing with the Bangladesh economy and the Bangladesh stock market.

scholarly journals Does financial system development, capital formation and economic growth induces trade diversification?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sohail Amjed ◽  
Iqtidar Ali Shah
Keyword(s):  
Economic Growth ◽  
System Development ◽  
Negative Relationship ◽  
Financial System ◽  
Capital Formation ◽  
Sultanate Of Oman ◽  
Content Type ◽  
Long Run ◽  
Short Run ◽  
Oil Sector

PurposeThe purpose of this study is to investigate long-run and short-run relationships between trade diversification, financial system development, capital formation and economic growth.Design/methodology/approachARDL estimation approach is applied to analyze long-run and short-run relationships between the financial system development, capital formation, economic growth and trade diversification in case of the Sultanate of Oman over the period 39 years starting from 1979 till 2017.FindingsThe results show that financial system development and economic growth has a positive impact on trade diversification in the short-run and long-run. However, capital formation has a negative impact on trade diversification in the short run and long run. The negative relationship between trade diversification and capital formation implies that over the period of study, the investment in capital goods was made to enhance the production capacity of the oil sector to maximize revenue.Research limitations/implicationsThis research is limited to analyze long-run and short-run relationship between the financial system development, capital formation and economic growth and trade diversification in case of Sultanate of Oman.Practical implicationsTo achieve the diversification goal, the policymakers need to formulate policies to strengthen the financial system and invest in infrastructure development to promote the non-oil sector. The research findings of this study will provide insights to the policymakers to formulate an effective diversification policy.Originality/valueThis research contributes to the existing literature by providing empirical evidence of the short-run and long-run analysis of the selected variables in the context of an oil-dependent country.

scholarly journals Effects of Corruption and the Black Economy on Economic Growth in the CFA Franc Zone Countries

2021 ◽  
pp. 33-45
Author(s):  
Raphaël Erick Assoa Essono ◽  
Ibrahim Nji Ngouhouo
Keyword(s):  
Economic Growth ◽  
Negative Relationship ◽  
Underground Economy ◽  
Group Method ◽  
Franc Zone ◽  
Pooled Mean Group ◽  
Long Run ◽  
Short Run ◽  
Cfa Franc Zone ◽  
Cfa Franc

We conducted this study to empirically analyse the effects of corruption and the underground economy on economic growth in the case of the CFA franc zone countries over the period 2000-2016. To do so, we have carried out econometric estimations using panel data. Our empirical results obtained by the PMG (Pooled Mean Group) method confirm a negative relationship between economic growth and the underground economy in the short and long term. However, the long-run effect of corruption on economic growth is positive, while this effect becomes negative in the short run. The results could provide insight into different ways of fighting corruption and the shadow economy.

scholarly journals Re-estimation of Keynesian Model by Considering Critical Events and Multiple Cointegrating Vectors

2015 ◽  
Vol 54 (2) ◽  
pp. 123-145
Author(s):  
Hafsa Hina ◽  
Abdul Qayyum
Keyword(s):  
Exchange Rate ◽  
Random Walk ◽  
Error Correction ◽  
Unit Root ◽  
Dynamic Error ◽  
Correction Model ◽  
Keynesian Model ◽  
Long Run ◽  
Out Of Sample ◽  
Short Run

This study employs the Mundell (1963) and Fleming (1962) traditional flow model of exchange rate to examine the long run behaviour of rupee/US $ exchange rate for Pakistan economy over the period 1982:Q1 to 2010:Q2. This study investigates the effect of output levels, interest rates and prices and different shocks on exchange rate. Hylleberg, Engle, Granger, and Yoo (HEGY) (1990) unit root test confirms the presence of non-seasonal unit root and finds no evidence of biannual and annual frequency unit root in the level of series. Johansen and Juselious (1988, 1992) likelihood ratio test indicates three long-run cointegrating vectors. Cointegrating vectors are uniquely identified by imposing structural economic restrictions on purchasing power parity (PPP), uncovered interest parity (UIP) and current account balance. Finally, the short-run dynamic error correction model is estimated on the basis of identified cointegrated vectors. The speed of adjustment coefficient indicates that 17 percent of divergence from long-run equilibrium exchange rate path is being corrected in each quarter. US war with Afghanistan has significant impact on rupee in short run because of high inflows of US aid to Pakistan after 9/11. Finally, the parsimonious short run dynamic error correction model is able to beat the naïve random walk model at out of sample forecasting horizons. JEL Classification: F31, F37, F47 Keywords: Exchange Rate Determination, Keynesian Model, Cointegration, Out of Sample Forecasting, Random Walk Model

scholarly journals Impact of Inflation Targeting Policy Framework of Countries between the Period of 2009-2019

2021 ◽  
Vol 7 (2) ◽  
Author(s):  
Ananda Rathnayake
Keyword(s):  
Economic Growth ◽  
Money Supply ◽  
Inflation Targeting ◽  
Karl Marx ◽  
Time Series Data ◽  
Negative Relationship ◽  
Policy Framework ◽  
Series Data ◽  
Long Run ◽  
Short Run

Today, many countries in the world tend to choose Inflation Targeting Monetary Policy Framework, in which context it has become a matter of debate whether inflation or economic growth is driven by monetary expansions. The common acceptance is that inflation is created by the continuous rise in the money supply which is strongly proved through the economic theories forwarded by Karl Marx, Irvin Fisher and Friedman. The main aim of the study is to examine the relationship between money supply and economic growth under a broad phenomenon by utilizing the countries with inflation targeting policies in action. The time-series data have been collected from different countries that exercise inflation targeting from 2009 to 2019 and the sample included 39 countries from all over the globe, both from developed and developing categories. The utilized Autoregressive Distribution Lag (ARDL) model forwarded the results suggesting that there is a significant negative relationship between the economic growth and money supply in the long run while no relationship has been observed in the short run.

scholarly journals Revisiting the debt-growth nexus: Evidence from India

2021 ◽  
Vol 66 (231) ◽  
pp. 151-171
Author(s):  
Pratibha Saini ◽  
Krishna Muniyoor
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Negative Relationship ◽  
Sustainable Growth ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Significant Negative Relationship ◽  
Primary Surplus

The main purpose of this study is to examine the debt-growth nexus in India over the period 1984-2019 using Bayer-Hanck and Autoregressive Distributed Lag (ARDL) cointegration techniques. The findings of both techniques suggest the existence of a negative relationship between public debt and economic growth in the long run. The results also confirm the significant negative relationship between foreign exchange reserves and economic growth. Interestingly, the test results confirm the unidirectional causality running from public debt to economic growth in the case of India. From a policy perspective, reducing public debt is imperative to achieve long-term sustainable growth. Efforts should be made to circumvent the burden of burgeoning interest liabilities by generating a primary surplus, which will facilitate debt servicing and timely repayment of debt.

Causality between VAT and economic growth in Nigeria: An ARDL bounds testing approach

2018 ◽  
Vol 6 (1) ◽  
pp. 55
Author(s):  
Hammed Agboola Yusuf ◽  
Irwan Shah Zainal Abidin ◽  
Normiza Bakar ◽  
Oluwaseyi Hammed Musibau
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Error Correction ◽  
Trade Openness ◽  
Value Added ◽  
Error Correction Model ◽  
Domestic Investment ◽  
Correction Model ◽  
Long Run ◽  
Short Run

Value Added Tax(VAT) is a consumption tax imposed at every stage of consumption level whose burden is burned by final consumer of goods and services. In most developing economies in the world, VAT as a source of revenue to the government that has been notable for its significant role in ensuring economic efficiency. However, VAT revenue has been underutilised in Nigeria due to a high level of corruption in the process of administering the tax. This study examines the impact of VAT, domestic investment and trade openness on economic growth in Nigeria from 1980 to 2016 using ARDL techniques. The research design is time series, and the data were analysed using time series unit root test, error correction model regression, short run and long run ARDL. The result found that VAT, domestic investment and trade openness had a positive and significant impact on real GDP. Also, corruption index is negative also significant in the long run. In the same vein, past value added tax had a negative and weak significant impact on real gross domestic product indicating convergence to long-run causality between economic growths and VAT and economic growth. The Error Correction Model (ECM (-1)) coefficient had a negative and statistically significant sign. This shows that 39 percent can quickly correct short-run deviation. The study, therefore,  recommends that tax administrative loopholes should be plugged for tax revenue to contribute immensely to the development of the economy since past VAT had a significant impact on economic growth.

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