Investigating government spending multiplier for the US economy: empirical evidence using a triple lasso approach

An essential dilemma in economics that has yielded ambiguous answers is whether governments should spend more in recessions. This paper provides an extension of the work of Ramey & Zubairy (2018) for the US economy according to which the government spending multipliers are below unity, especially when the economy experiences severe slack. Nonetheless, their work suffered from some limitations with respect to invertibility and weak instrument problem. The contribution of this paper is twofold: Firstly, it provides evidence that a triple lasso approach for the lag selection is a useful tool in removing the invertibility issues and the weak instrument problem. Secondly, the main results using a triple lasso approach suggest multipliers below unity for most cases with no evidence for differences between different states of the economy. Nevertheless, re-running the code in Ramey & Zubairy (2018), the case where WWII is excluded exhibits multipliers above unity, in both the military news and Blanchard-Perotti specifications, contradicting their baseline findings and providing evidence for a more effective government spending in recessions.

Impact of international trade on employment in orange industry of South Africa

The purpose of the study is to analyse the long-run and short-run dynamic relations amongst total employment (lnEMPGt), export output (EXPOt) and import output (IMPOt) from 1990 to 2018, by applying a time-series analysis. The study adopts the secondary data for total employment from the Citrus Growers Association of South Africa, while both export and import output were sourced from the Global Trade Atlas. The multivariate cointegration approach is adopted in the study to identify any causal relationships amongst the concerned variables. The chosen optimum lag selection criterion was the Akaike Information Criterion (AIC) due to its association dependence on the log-likelihood ratio. The third lag was selected for the entire analysis. The results from the cointegration test and the Vector Error Correction Model (VECM) suggest a positive long-run effect between total employment and export output, while import output is negatively associated with total employment. The adjustment term of lnEMPGt, EXPOt and IMPOt suggests that the previous year’s errors are corrected for the current year at a convergence speed of 0.002, 1.11 and 25.37 percentage points, respectively. The results of the Granger causality test show that there are bidirectional causality effects between export output and total employment in the long run, while there are no causality effects between import output and total employment. The overall conclusion is that export outputs positively impact employment, while import outputs impact it negatively in the South African orange industry.

The Impact of Foreign Direct Investment on Trade (Export and Import) in Turkey

It is said that after globalization processes foreign direct investment start to influence trade moreover it is very complicated to deduce the relationship between trade and FDI according to theoretical analysis. Therefore, empirical studies showed that until the 1980s international trade generated direct investment but after 1980s FDI started to heavily influencing international trade. Also, results showed that the relationship can differ from one country to another. Thus, this paper is aimed to analyze the impact of Foreign Direct Investment inflow on the macroeconomic variable as a Trade (Export, Import) in Turkey. The paper covers the time period from 1974 to 2017. The time series datasets, those are obtained from World Bank and IMF database are utilized in employed statistical models as ADF Unit Root, VAR lag selection, Johansen co-integration, and the Granger Causality tests, to fulfill empirical part of the paper. Based on results, it was confirmed that there was the presence of the co-integration between analyzed series. Additionally, results of Granger causality test showed that there is unidirectional causality from Export and Import to FDI.

The Impact of Foreign Direct Investment on Trade (Export and Import) in Turkey

It is said that after globalization processes foreign direct investment start to influence trade moreover it is very complicated to deduce the relationship between trade and FDI according to theoretical analysis. Therefore, empirical studies showed that until the 1980s international trade generated direct investment but after 1980s FDI started to heavily influencing international trade. Also, results showed that the relationship can differ from one country to another. Thus, this paper is aimed to analyze the impact of Foreign Direct Investment inflow on the macroeconomic variable as a Trade (Export, Import) in Turkey. The paper covers the time period from 1974 to 2017. The time series datasets, those are obtained from World Bank and IMF database are utilized in employed statistical models as ADF Unit Root, VAR lag selection, Johansen co-integration, and the Granger Causality tests, to fulfill empirical part of the paper. Based on results, it was confirmed that there was the presence of the co-integration between analyzed series. Additionally, results of Granger causality test showed that there is unidirectional causality from Export and Import to FDI.

New Methods in Exploring Old Topics: Case Studying Brittle Diabetes in the Family Context

Background. In questing for a more refined quantitative research approach, we revisited vector autoregressive (VAR) modeling for the analysis of time series data in the context of the so far poorly explored concept of family dynamics surrounding instable diabetes type 1 (or brittle diabetes).Method. We adopted a new approach to VAR analysis from econometrics referred to as the optimized multivariate lag selection process and applied it to a set of raw data previously analyzed through standard approaches.Results. We illustrated recurring psychosomatic circles of cause and effect relationships between emotional and somatic parameters surrounding glycemic control of the child’s diabetes and the affective states of all family members.Conclusion. The optimized multivariate lag selection process allowed for more specific, dynamic, and statistically reliable results (increasingR2tenfold in explaining glycemic variability), which were derived from a larger window of past explanatory variables (lags). Such highly quantitative versus historic more qualitative approaches to case study analysis of psychosomatics surrounding diabetes in adolescents were reflected critically.