Energy Consumption and Economic Growth Nexus in Pakistan

The study explored the link between energy consumption and economic growth in Pakistan covering the period from 1980 to 2018. This study used an augmented production function and combined the two neo-classical and ecological points. Most important is that this study used three different proxies of energy to check whether the relationship is proxy specific or not in Pakistan. Furthermore, there are some controls in terms of trade and foreign direct investment to check the robustness of the relationship. The time series approaches as augmented dickey fuller (ADF) unit root test and ARDL bound test approach has applied. The results indicated the long-run positive relationship between energy and growth in Pakistan and the relationship is not proxy specific. Therefore, it has suggested enhancing energy efficient policies, better resource allocation for energy supply.

Malaysia’s Healthcare Expenditure: ARDL Bound Test

This study aims to analyse the relationships between income level, education expenditure, inflation, and ageing population towards health expenditure in Malaysia over the period of 1997 until 2017. This study employs Autoregressive Distributed-Lag (ARDL) Bound test in determining the long-run empirical relationships between all independent variables and healthcare expenditures in Malaysia. The findings show the existence of long run cointegration between healthcare expenditure inflation, income level, and the government’s education expenditure. The results confirmed that all independent variables have positive long run relationships, except the ageing population that displays a negative relationship in influencing healthcare expenditure in Malaysia. The regression result of GDPP shows income elasticity value of 0.690, reflecting the necessity of healthcare expenditure. The outcome of the paper hopes to provide insights on the importance of healthcare expenditure for the development of this country, especially on its economic fronts.

Does Financial Inclusion Promote Human Development? Evidence from India

The present study investigates the relationship between Financial Inclusion Index (FII) and Human Development Index (HDI) of Indian economy. The study developed FII for the Indian economy from 1991 to 2020 by using the dimensions of banking penetration, banking availability and usage of banking services. The well-known techniques of Analytical Hierarchy Process (AHP) and Technique of Preference by Similarity to Ideal Solution (TOPSIS) is used to develop FII. The ARDL bound test confirms the existence of a long-run relationship between financial inclusion and human development. Granger non-causality confirms the existence of bidirectional causality between financial inclusion and human development. As financial inclusion acts as a key for human development, government should adopt policies to speed up the financial inclusion process in India.

HOW DID COVID-19 PANDEMIC AFFECT THE TOURISM INDEX IN BORSA ISTANBUL?

This study aims to investigate the impact of the Covid-19 pandemic on Turkey's tourism sector. In the study, for the period 12 March 2020 - 31 August 2020 the daily data of the BIST tourism stock index and Covid-19 case and death counts in Turkey were used. The cointegration relationship between the Covid-19 pandemic and the BIST tourism index was investigated with the ARDL bound test. In addition, the effect of the Covid-19 pandemic on the BIST tourism index was tested with the FMOLS regression method. As a result of the ARDL bound test, it was determined that there is a long-term cointegration relationship between the Covid-19 case and death numbers and the BIST tourism index. According to the FMOLS regression model results, it is seen that the deaths of Covid 19 significantly affect the tourism index. A 1% increase in the number of deaths causes the BIST tourism index to decrease by 0.08%. The coefficient of the number of Covid-19 cases is not significant, showing that the number of cases does not have a sufficient effect on the tourism index.

Impact of Exchange Rate Fluctuations on India’s Manufacturing Exports: An Empirical Investigation on Long-Run Relation

After the collapse of the fixed exchange rate system of Bretton Woods, the fluctuations of exchange rate and its impact on macroeconomic performance and trade in countries around the world are becoming an increasing debate among researchers and policymakers. This study empirically investigates whether fluctuations in real exchange rate may affect real exports in the Indian context. The study has employed autoregressive distributed lag (ARDL) bound test procedure to analyse the long-run relationship among variables using quarterly data from 2005Q1 to 2017Q4. The results of the ARDL bound test reveal that real exports are cointegrated with relative prices, real exchange rate volatility and world real GDP. The study has found negative but insignificant impact of exchange rate volatility on exports, but world GDP as a proxy of foreign economic activity and real effective exchange rate as relative prices have positive and statistically significant impact on Indian manufacturing exports. Further, the ARDL short-run error correction model implies that while the model may temporarily deviate from its long-run equilibrium, the deviations adjust towards the equilibrium level in the long run. JEL Codes: F01, F31, F14

Interest rate and exchange rate volatility and the performance of the Nigerian informal sector: Evidence from small and medium-sized enterprises

This paper investigates the joint impact of interest rate and exchange rate volatility on the performance of the informal sector in Nigeria, focusing on Small and Medium-sized Enterprises (SMEs). The annual time-series data on the exchange and interest rates for the period 1981-2018 were obtained from where exchange and interest rates volatility data were computed. The data analysis was carried out using descriptive statistics, correlation, a unit root test, an Autoregressive Distributed Lag (ARDL) bound test for cointegration and the ARCH regression model. The results obtained by the ARDL bound test confirmed the presence of the long-term relationship between interest and exchange rates volatility and SMEs' performance, which suggests that all the variables of interest move together in the long run. Moreover, the ARCH regression model showed a positive impact of exchange and interest rates volatility on SMEs' performance. However, only exchange rate volatility was significant. Thus, policy makers should pursue the interest rate and exchange rate regimes that will encourage massive investments in SMEs. This, in turn, would increase the performance of SMEs. Also, the monetary authorities should implement the policies aimed at curtailing incessant volatility in the exchange rate and the interest rate so as to protect SMEs from the external perturbations of the movements of the exchange rate and the interest rate.

Determinants of Trade Deficit in Nepal: An Econometric Investigation

Background: Nepal has been importing some of goods and services from other countries and is also capable of exporting some other goods and services to foreign countries. Because of over dependency on foreign goods, Nepal has been suffering from trade deficit for more than 45 years. Objective: This study aims to investigate the relationship of trade deficit in Nepal with its determinants by using econometric analysis where exchange rate, real gross domestic product and foreign direct investment are taken as determinants of trade deficit. Its main objective is to examine the long-run, short-run and causal relationship among the variables. Materials and Methods: Annual time series data from 1974/75 (from 1988/89 in case of FDI) to 2018/2019 obtained from different sources: Nepal Rastra Bank, Economic Survey of Nepal, The World Bank and Department of Industry, Nepal Government were used in this study. Unit root test was used to check stationary. Autoregressive Distributed Lag (ARDL), ARDL bound test and Error Correction Model (ECM) were applied to find short-run as well as long-run relationship. Finally, pair-wise causal relationship was tested by using Granger causality. Results: All variables were found to be stationary at first difference. The test statistic of ARDL bound test was 8.17 and was greater than upper bound of 6.36 at 1% significance level. Error correction term’s p-value was 0.0052 and the corresponding values for pair-wise Granger causality from trade deficit to FDI and FDI to trade deficit were 0.00009 and 0.00005, respectively. Conclusion: There was positive and significant long-run relationship between exchange rate and trade deficit whereas there was negative and significant long-run relationship between real GDP and trade deficit. Moreover, real GDP positively affected trade deficit in short-run. Furthermore, bidirectional causal relationship has been observed between FDI and trade deficit.