Effectiveness of Public Spending before and during COVID-19 Pandemic

The pandemic of COVID-19 influences all sectors of the economy. It caused decreasing in produced Gross domestic product (GDP) and higher unemployment. As it is known, to overcome this negative tendency, it is possible to put in practice monetary and fiscal instruments. During the pandemic, the government tried to slow down negative economic results through public spending. With them, the government looks to be increased aggregate demand in the economy and as a result-GDP raises and unemployment reduces. The research is based on created original model for testing the impact of total public spending, capital, salary, social insurance and care, for maintenance by a consolidated fiscal program on the value of GDP. The changes of GDP measure the effectiveness of public spending. The period of research is before and during the COVID-19 crisis (2019-2020) in the case of Bulgaria. Before the pandemic the analysis shows coefficient of determination for capital spending is more significant compare with all other types of public expenditure and these cost predetermine economic growth. During the pandemic of COVID-19 public spending has used as the main instrument to overcome the negative results for the economy. For this period it found an extremely strong impact of labor costs and social care expenditure on aggregate demand. They bring more positive results to be solved health issues, but not for faster recovery of the economy.

Digital and economic transformations for sustainable development promotion: A case of OECD countries

Digitalization, dematerialization of production and consumption, and structural shifts in the direction of service economy forming do promote to reduction of material use and sustainable development. The paper aims to investigate the role of digital, structural, economic, and social factors in sustainable development promotion in OECD countries. The paper uses the data on digital achievements, social and economic development of OECD member states from World Bank data sources for the period 2007–2018. The random-effects GLS regression model is used, and empirical regression models to estimate the influence of key factors related to digital transformation on GDP per capita and CO2 emissions per capita are constructed. The results of the regression analysis show that using the number of Internet users as an indicator for achievement in digitalization has a positive and statistically significant influence on GDP per capita due to lower transaction costs and higher share service economy. An increase in urbanization rates (as an indicator of capital concentrations and labor specialization) by one percent promotes a GDP per capita increase of 299 USD. Also, an increase in Gini coefficient by one percentage point correlates with decrease in GDP per capita on 196 USD and the reduction of CO2 per capita by 0.12 tones due to the structural shifts in aggregate demand. Still, improvements in digital transformations have no significant environmental effect in OECD members, while processes related to urbanization, income inequality, and share of industrial output are important drivers for CO2 per capita reduction. AcknowledgmentsThe paper contains the results of a study conducted within the framework of research projects: “Sustainable development and resource security: from disruptive technologies to digital transformation of Ukrainian economy” (No. 0121U100470); “Fundamental bases of the phase transition to an additive economy: from disruptive technologies to institutional sociologization of decisions” (No. 0121U109557).

Inflation Effect on Unemployment in Indonesia: A Comparative Studies Between Sharia and Conventional Economic Perspectives

This study discusses the effect of inflation on unemployment by comparing the perspective of Islam with capitalism. The purpose of this study is to identify the driving factors that cause inflation and unemployment. This research is conducted using descriptive analysis through linear regression analysis on Indonesia’s unemployment and inflation data from 2001 to 2019. This study found that inflation was not the main contributor to unemployment and only accounted for 18.6% of unemployment, whereas the remaining 80.4% was caused by other factors. This occurs because the increase in prices are not due to aggregate demand, but due to natural and man-made factors. To overcome inflation, the government should create policies to promoting a culture of saving, investing and discouraging wasteful and excessive spending from early age and improve the morale of officials and entrepreneurs. In addition to that, the government can also implement the law firmly and consistently to all parties who commit unethical behaviour; second, increasing the role of the community to observe and report corruption. To reduce the rate of unemployment, the government can implement several policies. Those are implementing policies that make it easier for startups to obtain capital, create investment security and facilitate licensing bureaucracy; second, providing more free and accessible work training courses, especially in urban areas; third, implement 12-year compulsory education consistently.

Macroeconomics Activity and Role of Zaka in Achieving Economic Stability (Aggregate Demand/ Mathematical Analysis Study): الزكاة والنشاط الاقتصادي الكلي ودورهما في تحقيق الاستقرار الاقتصادي (الطلب الكلي/ دراسة تحليلية اقتصادية رياضية)

This research aimed to clarify and show the economic impact of Zaka fund development through theoretical, mathematical, and graphical analysis on macroeconomics variables which is related to aggregate demand, Researchers used theoretical, mathematical, graphical approaches for explanation economic variables. and used deductive approach through shows the effect of zakat on the aggregate Demand. The researcher concludes that the duty of Zaka induces economic growth and protects the economy from risk fluctuations whether it is recession or inflation. The researcher recommends to work on promoting the revival of Zaka, and the Zakat should be compulsory not voluntary through laws and regulations, ࢫbecause it raises the level of economic activity through its direct effect to stimulate fund investment, raise consumer’s demand and expand the market.

Innovation immunity of Russian economy

Introduction. The article examines the general immunity of the Russian economy to innovation, which is inherent in it at the present stage. It is caused by a number of macro and microeconomic, as well as institutional factors. This was an important reason that did not allow us to achieve a number of ambitious economic goals set by the country’s leaders. Theoretical analysis. The review of empirical and statistical material confirms the negative trends that exist in Russian economy, associated with a decrease in the innovative activity of enterprises and organizations. Among the macroeconomic factors of innovation immunity of the Russian economy, the following are distinguished: a one-sided developed economic structure with a hypertrophied predominance of raw materials and energy-producing industries with a low added value of the final product; insufficient aggregate demand for innovation on the part of the state, firms and households, as well as the lack of investment resources for enterprises and organizations to implement innovation activities. Microeconomic factors of the Russian economy’s immunity to innovation are: lack of internal sources of financing from enterprises; the high cost of credit resources; lack of tax incentives and the lack of effective state support for innovation, especially at the level of small and medium-sized businesses. support for innovation, especially at the level of small and medium-sized businesses. Results. It is concluded that the support of innovation activity requires the protection of property rights, a fair tax and judicial system, the absence of administrative barriers and excessive regulation, the presumption of innocence of the entrepreneur, and general political and economic stability. At the present stage, it is necessary to develop a unified state strategy for innovative development, focused on increasing labor productivity and achieving sustainable economic growth, support innovation, especially at the level of small and medium-sized enterprises.

The income elasticity of lottery revisited: a worldwide perspective

Using panel data information from The WLA Global Lottery Data Compendium this paper estimates aggregate demand functions for lottery tickets in order to examine variation in the income elasticity of lottery tickets worldwide. The analysis uses a panel data quantile regression approach. The estimated elasticities are compared across income quartiles and world regions. The results provide evidence that a significant variation in the income elasticities across both geographic areas and the income distribution exists. Also, a clear heterogeneity in the incidence of lottery expenditures is observed. Overall, it is found that lottery is a normal good.

A Review of the Unemployment - Economic Growth Nexus in Nigeria from 1980 to 2015: A Disaggregated Approach

The phenomenon of jobless growth in Nigeria in recent years has called to question the Okun’s law that the growth of gross domestic product (GDP) reduces unemployment. This study therefore, analyses the nexus between GDP growth and unemployment in Nigeria by disaggregating total output into its sectoral components to analyze the impact of sectoral output on unemployment using data from 1980 to-2015 employing the econometric technique of Autoregressive Distributed Lag (ARDL) bound testing approach. Two ARDL models were specified. The first bound test revealed the existence of co integration between unemployment and GDP growth. The growth of GDP is positively related to unemployment in the long run but a negative relationship was found in the short run. The result of the disaggregated model (i.e the second ARDL model) found no long run relationship between unemployment and agriculture, industry, construction, trade, and services. We opined that the findings of the disaggregated model resulted from the disconnection between aggregate demand and aggregate supply of the productive sectors and the lack of direct linkages between the oil sector and other sectors of the economy. The study recommends that such linkages should be forged through enhanced funding of research and development, technological innovation and the development of value chain of agriculture and solid minerals output. Nigerians should be encouraged to consume locally made products. Efforts should be intensified to develop direct linkages between the oil sector and other sectors through input supply contracts and the development of downstream industries in the oil sector.

Proposed model for predicting economic growth based on the Keynesian aggregate demand equation: Case of Ecuador 1965-2018

It is important for researchers and economic policy makers to forecast GDP but sometimes it is complicated or expensive to access the information of the five components of the equation, so this research proposed to validate a model as parsimonious as possible that would make reliable predictions of GDP. Through an iterative process they were estimated and validated, using multiple linear regression and based on the Expenditure Method equation, equations to whichnon-significant and / or less explanatory regressors were eliminated seeking maximum parsimony, to then prove the predictive power of valid equations. As a result, a statistically valid estimator with high predictive power was found, but it includes the five regressors of the original equation. Keywords: GDP, aggregate demand, forecast, parsimony. References [1]E. López Fernández de Lascoiti, «CRACK DE 1929: Causas, desarrollo y consecuencias.,» Revista Internacional del Mundo Económico y del Derecho, vol. I, pp. 1 - 16, 2009. [2]J. Montano, «Gran Depresión: Causas, Características y Consecuencias,» 2019. [Online]. Available: https://www.lifeder.com/gran-depresion/. [3]M. Rapoport, «La crisis de 1929, la teoría económica y el New Deal,» 2008. [Online]. Available: https://www.pagina12.com.ar/diario/economia/subnotas/111712-35315-2008-09-17.html. [4]J. Ros, «La Teoría General de Keynes y la macroeconomía moderna,» 2012. [Online]. Available: https://www.redalyc.org/pdf/601/60123307002.pdf. [5]M. Kiziryan, «Demanda agregada,» 2019. [Online]. Available: https://economipedia.com/definiciones/demanda-agregada.html. [6]G. Mankiw, Macroeconomía, 6ta. Ed., España: Antoni Bosch, editor, S.A., 2006. [7]L. Gastón Lorente, «Cómo calcular el PIB: Tres métodos,» 2019. [Online]. Available: https://www.bbva.com/es/bbva-patrocina-el-almuerzo-inaugural-de-la-cumbre-del-clima-disenado-por-los-hermanos-roca/. [8]R. Dornbusch, S. Fischer and R. Startz, Macroeconomía, 10ma. Ed., México D. F.: McGraw-Hill/Interamericana Editores, S.A. de C.V., 2009. [9]A. B. Abel and B. S. Bernanke, Macroeconomía, 4ta. Ed., Madrid: Pearson Educación S.A., 2004. [10]S. Jahan, A. Saber Mahmud and C. Papageorgiou, «¿Qué es la economía keynesiana?,» 09 2014. [Online]. Available: https://www.imf.org/external/pubs/ft/fandd/spa/2014/09/pdf/basics.pdf. [11]D. A. Lind, W. G. Marchal and S. A. Wathen, Estadística aplicada a los negocios y la economía. 15ta. Ed., México D.F.: McGraw Hill/Interamericana Editores S.A. de C.V., 2012. [12]R. S. Pindick and D. L. Rubinfeld, Econometría: Modelos y pronósticos, 4ta. Ed., México D.F.: McGraw-Hill Interamericana, 2001. [13]D. R. Anderson, D. J. Sweeney and T. A. Williams, Estadística para administración y economía. 10ma. Ed., México D.F.: Cengage Learning Editores, S.A., 2008. [14]Banco Central del Ecuador, «Información Económica-Estadísticas del sector real,» 2020. [Online]. Available: https://contenido.bce.fin.ec/documentos/Administracion/CuentasNacionalesAnuales.html. [15]D. N. Gujarati and D. C. Porter, Econometría. 5ta. Ed., México, D. F.: McGraw Hill Educación, 2010. [16]E. Court and E. Williams, Estadísticas y econometría financiera, 1ra. Ed., Buenos Aires: Cengage Learning Argentina, 2011. [17]R. Montero Granados, «Modelos de regresión lineal múltiple,» Documentos de Trabajo en Economía Aplicada. Universidad de Granada. España, 2016. [18]R. A. Fernández Montt, «Regresión lineal. Multicolinealidad perfecta,» 2006. [Online]. Available: http://www.eumed.net/cursecon/medir/rfm-multico.htm. [19]C. . H. Achen, Interpreting and Using Regression, Beverly Hills: Sage, 1982. [20]J. M. Wooldridge, Introducción a la econometría. Un enfoque moderno. 4ta. Ed., México, D. F.: Cengage Learning, 2010. [21]R. Geary, «Some Results about Relations Between Stochastic Variables: A Discussion Document,» Review of International Statistical Institute, vol. 31, pp. 163-181, 1963.