Applied Econometrics and International Development Vol. 8-1 (2008)
|
|
- Morris Adams
- 5 years ago
- Views:
Transcription
1 A CONTRIBUTION TO THE ANALYSIS OF THE ECONOMIC GROWTH OF QATAR EL-MEFLEH, Muhannad A. * SHOTAR, Manhal M. Abstract This paper delineates the theoretical structure of the factors that determine economic growth in Qatar. The focal point of this paper is identifying the role of major macroeconomic variables that determine growth, namely; government spending, institutional settings, money supply, investment, inflation, education and the degree of economic openness. The major findings of this paper are that the empirical evidence indicates that the (1) various shocks explain different proportions of GDP movements over time, (2) GDP seems to be more susceptible to government spending and economic risk shocks than to other variables, and (3) education, investment, and monetary policy (general price level) shocks seem to have a moderate impact on GDP movements over the entire time horizon. Also, there was little evidence that the rest of the variables have an impact on economic growth. JEL Classification: F41, F43, E52 Key Words: Economic Growth, Economic Openness, Government Spending. 1. Introduction Qatar is a small, open, well monetized economy with no interest rate ceilings on deposits, and where market forces determine the interest rates. It does not have a demographic trap, poverty trap, or a savings trap like some of the other developing countries. Since the mid 1990s, the continuous efforts by policy makers to diversify revenues, control public expenditures, and privatization have led to the improvement of productivity and enhanced long-term economic growth. Qatar's real Gross Domestic Product (GDP) has been growing at high rates of almost 6% during the last 10 years. The inflation rate is relatively low even when compared to the average rate of inflation for the industrialized countries 1. In recent years, some developments have taken place which have led to more effective fiscal policy, created a more favorable business and economic environment, and enhanced the role of the private sector 2. Despite the increase in oil prices and revenues, economic reforms have continued to be top priority for the decisionmakers. Meanwhile, other measures have taken place to build up a comprehensive legal and economic system which is attractive to foreign investment and consistent with a free market and outward-oriented Qatar economy. In 1990s, the government of Qatar started to amend the legislative and bureaucratic framework to ensure easy and adequate inflow of foreign capital. Law No. 25 of 1990 allowed non-qatari capital to participate in a wide range of economic activities that were Qatari exclusive. In 2000, the Qatari government amended the laws that govern the legal and economic environment, thus allowing foreign * Muhannad A. El-Mefleh, Ph.D, American River College, Sacramento, CA, USA, elmeflm@arc.losrios.edu, Manhal M. Shotar, Ph.D, Senior Finance Economist. Advisor to Financial Management Reform/Ministry of Finance, German Technical Cooperation (GTZ), Amman, Jordan.
2 investors to exercise 100% ownership in any project. The exception to this is banking, insurance, and general trading where 51% Qatari partnership is still required. Also, the government introduced intellectual property right laws and reduced tariffs to comply with the World Trade Organization (WTO) standards. The rest of the paper is structured as follows: Section one provides a theoretical background and a review of the relevant literature. Section two provides the sources of the data set. Section three discusses the methodology and the empirical approach which is based on Vector Autoregressive (VAR) techniques. Section four reports test results and analysis. Section five concludes the paper. 2. Theoretical framework There are two types of economic growth models. One type is based on the Solow (1956) growth model and the other type is based on the Romer (1986) growth model. Solow type models rely on capital accumulation where population growth and technological progress are exogenous. Therefore, if population growth and technological progress are identical in different market economies, then in the long run under Solow type models these economies will reach the same rate of growth. So long-term growth according to Solow type models is not influenced by policy; policy makers have no influence on the outcome. A steady state, where the change in capital-labor ratio is zero and the level of output and capital stock are increasing at the same rate as population growth, would produce the same level of per capita income per worker. Therefore, the long run growth rate of the economy would be equal to the combined growth rate of labor force and technological progress. Growth rate is impacted by savings rate where high savings lead to accumulation of capital, an increase in the productivity of workers, and an increase in the level of GDP. Solow s model implies that the rate of growth varies between countries due to the distance of each country from the steady state. Thus, underdeveloped economies would grow faster than developed economies and the per capita income will eventually converge. The Romer model (1986) emphasizes that policies and incentives can explain the difference in long-run growth rates across countries. Inventions are not exogenous and have positive externalities which reduce the cost of future innovations. Thus, education plays an important role not only for innovation but also in determining long-term growth. Schumpeter (1950) and Romer (1990) argued that motivation for profit, and not intellectual inquiry, is the major reason for innovations. So, technological changes are endogenous factors and not exogenous. Therefore, growth is related to the policies and the institutional setting of a given economy rather than on natural endowment. If one accepts the endogenous factors as the reason for growth, then growth is not correlated to per capita income per worker. Every innovation and new product adds to human knowledge. Also, the faster the technological progress is, the larger the accumulation of human knowledge and the lower the cost of innovation. Thus, the law of diminishing returns on capital given labor as a constant is not an acceptable assumption. Based on the endogenous growth type models, per capita income per worker would grow faster in 148
3 El-Mefleh, M.A.,Shotar, M.M. A Contribution To The Analysis Of The Economic Growth Of Qatar countries with relatively educated populations that have more capital stock per worker and have institutional settings that favor accumulation of human knowledge. Knowledge applications may be excludable without the permission of the inventor, but knowledge itself is not excludable. In addition, knowledge outlives any individual while human capital vanishes with the death of the individual. Institutional settings include the competitive structure of the economy, political stability, government efficiency, and the degree of economic openness, all of which influence innovation and growth. Endogenous growth type models show that a country with plenty of physical capital and even more so human capital would continue to grow faster than a country with less of these resources. Long-term economic growth is a function of investment in human capital, political stability, well-defined property rights, physical investment, low trade barriers, and low government spending on consumption. Empirical estimations of a positive relationship between growth and an educated labor force were provided by Barro (1991), Mankiw, Romer, and Weil (1992). Political stability, well-defined property rights, and a stable government policy toward private investment would increase investment and economic growth. Ruhashynkiko (2005) showed that the higher the government spending on consumption as a percentage of GDP, the lower the growth rate. Gould and Ruffin (1993) assert that an economy that is more open to international trade and has high human capital would experience faster economic growth than a less open economy. Physical capital in the form of equipment would continue to be essential for economic growth. Machinery increases marginal productivity of labor, transforms production modes of society, and consequently increases the GDP and the growth rate. Romer (1986) presented his endogenous growth model where human capital as a factor of input led to an increase in the marginal productivity of labor and an increased growth rate over time. Also, he demonstrated that large countries could achieve higher growth rates than small countries. However, under the Romer type model, long-term growth is essentially dependent on the endogenous accumulation of knowledge and an increased return assumption. Accumulation of human knowledge is dependent on the amount of investment in research. Therefore, there is no reason to believe that per capita income across countries will converge rather than diverge over time. Lack of human capital development may lead to no growth or low rates of growth in the long run. Romer (1990) showed that market size, and not population size, had a positive effect on research and consequently growth. Growth is dependent on human capital and not population. Romer made three basic assumptions in developing his model. These assumptions are positive externalities of new knowledge, decreasing return in producing new knowledge at a given time, increasing return on human capital and decreasing return on physical capital. A positive outcome of combined increasing return on human capital and decreasing return on physical capital leads to an increasing marginal productivity of capital-labor ratio. Government can create the incentives for the private sector to become an engine of economic growth. These incentives include reasonable regulations, friendly policies toward capital, streamlining the rules that govern the establishment of new business, providing useful and more accurate data to make better investment decisions, promoting responsible corporate governance, open dialog with the private sector, and 149
4 targeting support for small and medium sized enterprises. Economic capacities are built, acquired and endowed. They are built in the form of institutional settings, physical capital, and social capital. Economic capacities are acquired by investing in research and human capital to generate knowledge and new ideas. Economic capacities are endowed with accessible natural resources, arable land, and labor. These economic capacities are seldom fully utilized, if ever, in any economy. For the purpose of this study, the following model is used: GDP= f (MM, P, I, OPEN, S, G, R) Where: GDP is real Gross Domestic Product growth rate, MM: M2/GDP ratio, P: inflation rate, I: Gross growth of capital formation measures investment, S: Percentage of government spending on education, OPEN is the ratio of exports and imports to GDP, G: (Government consumption)/gdp reflects government size (See final note 1 ) 1, R: Institutional quality as reflected in the International Country Risk Guide (final note 2 ) 2, The ratio of money supply to GDP is a measure of financial depth. Inflation rate reflects macroeconomic instability and the kind of monetary policy the monetary authority is using. The gross growth of capital formation measures investment. The ratio of exports and imports to GDP is an indicator of economic openness. Government spending/gdp reflects government size. Institutional quality is reflected in the International Country Risk Guide (ICRG) of Political Risk Group (PRG) index that evaluates a country s policy and institutional framework. The economic growth of a given economy is impacted by its institutional settings. Long-term democracy increases government incentives to implement sound economic policies and increase economic growth (see El-Mefleh 2005). However, democracy may increase the tendency to divert public resources toward consumption and away from investment. Empirical research does not help in settling the above two contradictory views. Both views lack support of a strong theoretical and empirical foundation to support either view. Plumper and Martin (2003) argued that high growth may not be achieved under a system where political participation is very limited. An autocratic government tends to choose tax structure, spending choices, and transfer payments programs to ensure political support of the majority of the elite in that society. A high growth rate could be achieved under a political system that is characterized by wider political participation where providing public goods is the only viable option for ensuring political survival. With wide political participation, the transfer payments programs, tax structure, and the government spending would target an increase in the public investment in collective goods. 2. Data The sample period corresponds to the years Data on GDP, P, G, S, I and OPEN are expressed in million dollars and were obtained from the Gulf Organization and Industrial Cooperation (GOIC) and the United Nations Statistics Division. While data on MM were obtained from the Department of Research and Statistics, Qatari Monetary Agency, various issues of the Quarterly Statistical Bulletin, as well as the Department of Economic Policies, the Qatar Central Bank, and various issues of Quarterly Statistical 150
5 El-Mefleh, M.A.,Shotar, M.M. A Contribution To The Analysis Of The Economic Growth Of Qatar Bulletin. Finally, data on R were obtained from the CountryData.com by the PRS Group. Figure 1 shows the rate of growth and risk rating (data in table A1 in the Annex) Figure 1. Rate of growth of real Gdp and Economic Risk Rating in Qatar, Economic Risk Rating Rate of growth of Gdp Methodology and empirical results 3.1- VAR Analysis: The Granger causality test allows us to examine two variables at a time. While, the use of vector autoregressive (VAR) technique which enables us to handle more than a pair of variables. We tested for unit roots and stationarity. Results are presented in Table (1). The Augmented Dickey Fuller (ADF) test statistics indicates that the presence of a unit root in gross domestic product, government spending, money supply, the degree of openness and economic risk cannot be rejected at the conventional level of significance. Table 1. The ADF test statistics in level and in first difference Variables ADF Level ADF First Diff CV 5% Variables ADF Level ADF First Diff CV 5% GDP G MM S I Open P R Variance Decomposition: As the results of the ADF test suggest, we model the variables in their first difference. Before determining the dynamic specification of our model, the lag length should be set. A simple procedure is followed. Since the error terms should be uncorrelated, k should be long enough to guarantee that. But in this case, we need to in vestigate the VAR model, i.e., interpret the short run dynamics and the speed of adjustment. Thus we can not allow for a large k that would exhaust the degrees of freedom and the economic interpretation would be fruitless. The diagnostic tests indicate that one lag is appropriate for the 151
6 residuals to approximate white noise. Table (2) reports the variance decomposition for the GDP. The results of the variance decomposition of the GDP indicate that various shocks explain different proportions of GDP movements over time. That is, GDP seems to be more susceptible to government spending and economic risk shocks than to other variables. Moreover, there is a negligible impact of investment on growth, especially in the first two years. Investment, the general price level, as well as education shocks seem to have a moderate impact on GDP movements over the entire time horizon. An interesting aspect of these results is that economic openness (OPEN) has a little effect on gross domestic product. This could be attributed to some extent to the economic diversifications that the country is embarking on which have the country insolated from fluctuations in the oil prices. Table 2: VDC test results Horizon GDP G P OPEN R I S MM Impulse Response Function: Figure A1 in the Annex shows the response of the GDP to one standard deviation shock to investment, itself, government spending, education spendin g, the general price level, economic risk, money supply and the degree of openness. A positive shock in the GDP increases the GDP until it reaches its maximum after three years, beyond which the effect starts to die out. Moreover, a positive shock in OPEN increases GDP until it reaches its maximum after two years, and then the effect turns negative in the fourth period. Thereafter, the effect decreases the GDP but, it seems that the shock impact dies out. The impact of education is very similar to that of the degree of openness, the only difference is the fourth period where OPEN is negative. On the other hand, a positive shock in government spending decreases the GDP starting with the first period. It reaches its maximum after two years, beyond which the impact turns positive and then the effect starts to die out. After that, G reaches its long-run level. A positive shock in investment decreases the GDP until it reaches its maximum after three years, and then the effect turns positive at period four. Thereafter, the effect increases the GDP up to the ninth period. The impact of the shock does not seem to diminish over time. While a positive shock in economic risk decreases the GDP until it reaches its maximum after two years, the shock impact continues to be negative for a long time. Thus, the effect decreases the GDP up to the fifth period and dies out after that. Money supply shock has the strongest negative impact but it weakens immediately after the second period. Finally, the general price level shock decreases the GDP at first but in the third period the shock impact dies out. 4. Conclusion The growth rate of the Qatari economy is influenced strongly and negatively by government consumption, but only moderately and negatively by expansionary monetary 152
7 El-Mefleh, M.A.,Shotar, M.M. A Contribution To The Analysis Of The Economic Growth Of Qatar policy shocks. Investment has a positive impact on the long-run growth rate while institutional setting seems to have a negligible impact on growth. Finally, spending on education has a positive impact on growth rate. Other aspects of the economic growth of Qatar would be worth investigating in depth in terms of their impact on women, industrial clustering, environmental regulations, and financial instability. Also, building a forecasting model for growth would be helpful for decision-makers. References Barro, Robert J. (1991). Economic Growth in a Cross section of Countries. The Quarterly Journal of Economics 106, May 1991, Pp Chatterjee, S., and Ali S. Hadi (1988) Sensitivity Analysis in Linear Regression (New York: John Wiley and Sons). El-Mefleh, Muhannad (May 2005). The Impact of Corruption on Investment in Jordan. Global Trends, International Business Association Conference Proceedings, Pp Gould, David M. and Roy J. Ruffin (1993). What Determines Economic Growth? Economic Review Federal Reserve Bank of Dallas; Second quarter 1993; ABI/INFORM Global, Pp Mankiw, N. Gregory, David Romer, and David N. Weil (1992). A Contribution to the Empirics of Economic Growth. The Quarterly Journal of Economics 107, May 1992, Pp Pindyck, R.S. and D.C. Rubinfeld (1981) Econometric Models and Economic Forecasts, Second ed. (New York: McGraw-Hill). Plumper, Thomas and Christian W. Martin (2003). Democracy, Government Spending, and Economic Growth: A Political-Economic Explanation of the Barro-effect. Political choice; October 2003; 117, 1-2; ABI/INFORM Global, Pp Romer, Paul M. (1990). Endogenous Technological Change. Journal of Political Economy, 1990, Vol. 98, No.5, Pp. S71-S102. Romer, Paul M. (1986). Increasing returns and Long-Run Growth. Journal of Political Economy, 1986, Vol. 94, No.5, Pp Ruhashyankiko, Jean-Francois (2005). Why Do Some Countries Manage to Extract Growth from Foreign Aid? International Monetary Fund Working paper, WP/05/53, March Schumpeter, Joseph A. (1950). Capitalism, Socialism, and Democracy. Third edition. (New York: Harper and Brothers). Shotar, Manhal (2005). The Attractiveness of Qatar to Foreign Direct Investment. Journal of Applied Econometrics and International Development. Vol. 5 No. 3, Pp Solow, Robert M. (1956). A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics, LXX (1956), Pp Summers, Robert, and Alan Heston (1988). A New set of international Comparisons of Real Product and Price Levels Estimates for 130 Countries, Review of Income and Wealth, XXXIV (1988), Pp Spending on education is not included. 2 Economic Risk Rating: A means of assessing a country's current economic strengths and weaknesses. In general, where strengths outweigh weaknesses, a country will show low risk and where weaknesses outweigh strengths, the economic risk will be high. To ensure comparability between countries, risk components are based on accepted ratios between the measured data within the national economic/financial structure, and then the ratios are compared, not the data. Risk points are assessed for each of the component factors of GDP per head of population, real annual GDP growth, annual inflation rate, budget balance as a percentage of GDP, and current account balance as a percentage of GDP. Risk ratings range from a high of 50 (least risk) to a low of 0 (highest risk), though lowest de facto ratings are generally near No trend no intercepts. 153
8 Appendix Table A1. Real GDP growh and Risk rating Year Real GDP Growth Economic Risk Rating Figure (1): Response of GDP to One S.D. Innovations GDP S G R I MM OPEN P Journal published by the EAAEDS: 154
Asian Economic and Financial Review SOURCES OF EXCHANGE RATE FLUCTUATION IN VIETNAM: AN APPLICATION OF THE SVAR MODEL
Asian Economic and Financial Review ISSN(e): 2222-6737/ISSN(p): 2305-2147 journal homepage: http://www.aessweb.com/journals/5002 SOURCES OF EXCHANGE RATE FLUCTUATION IN VIETNAM: AN APPLICATION OF THE SVAR
More informationGovernment Tax Revenue, Expenditure, and Debt in Sri Lanka : A Vector Autoregressive Model Analysis
Government Tax Revenue, Expenditure, and Debt in Sri Lanka : A Vector Autoregressive Model Analysis Introduction Uthajakumar S.S 1 and Selvamalai. T 2 1 Department of Economics, University of Jaffna. 2
More informationVolume 35, Issue 1. Thai-Ha Le RMIT University (Vietnam Campus)
Volume 35, Issue 1 Exchange rate determination in Vietnam Thai-Ha Le RMIT University (Vietnam Campus) Abstract This study investigates the determinants of the exchange rate in Vietnam and suggests policy
More informationConditional Convergence: Evidence from the Solow Growth Model
Conditional Convergence: Evidence from the Solow Growth Model Reginald Wilson The University of Southern Mississippi The Solow growth model indicates that more than half of the variation in gross domestic
More informationStructural Cointegration Analysis of Private and Public Investment
International Journal of Business and Economics, 2002, Vol. 1, No. 1, 59-67 Structural Cointegration Analysis of Private and Public Investment Rosemary Rossiter * Department of Economics, Ohio University,
More informationIntegration of Foreign Exchange Markets: A Short Term Dynamics Analysis
Global Journal of Management and Business Studies. ISSN 2248-9878 Volume 3, Number 4 (2013), pp. 383-388 Research India Publications http://www.ripublication.com/gjmbs.htm Integration of Foreign Exchange
More informationForeign direct investment and profit outflows: a causality analysis for the Brazilian economy. Abstract
Foreign direct investment and profit outflows: a causality analysis for the Brazilian economy Fernando Seabra Federal University of Santa Catarina Lisandra Flach Universität Stuttgart Abstract Most empirical
More informationVolume 29, Issue 3. Application of the monetary policy function to output fluctuations in Bangladesh
Volume 29, Issue 3 Application of the monetary policy function to output fluctuations in Bangladesh Yu Hsing Southeastern Louisiana University A. M. M. Jamal Southeastern Louisiana University Wen-jen Hsieh
More informationPOLITICAL INSTITUTIONS AND ECONOMIC GROWTH: A STRUCTURAL VAR APPROACH
POLITICAL INSTITUTIONS AND ECONOMIC GROWTH: A STRUCTURAL VAR APPROACH Hadhek Zouhaier Superior Institut of Gestion (ISG) of Gabès- Tunisia ISG Gabès rue Jilani Habib 6002 Gabès- Tunisia E-mail : hzouhair2000@yahoo.fr
More informationDo Closer Economic Ties Imply Convergence in Income - The Case of the U.S., Canada, and Mexico
Law and Business Review of the Americas Volume 1 1995 Do Closer Economic Ties Imply Convergence in Income - The Case of the U.S., Canada, and Mexico Thomas Osang Follow this and additional works at: http://scholar.smu.edu/lbra
More informationGovernment Consumption Spending Inhibits Economic Growth in the OECD Countries
Government Consumption Spending Inhibits Economic Growth in the OECD Countries Michael Connolly,* University of Miami Cheng Li, University of Miami July 2014 Abstract Robert Mundell is the widely acknowledged
More informationHow can saving deposit rate and Hang Seng Index affect housing prices : an empirical study in Hong Kong market
Lingnan Journal of Banking, Finance and Economics Volume 2 2010/2011 Academic Year Issue Article 3 January 2010 How can saving deposit rate and Hang Seng Index affect housing prices : an empirical study
More informationMONEY, PRICES, INCOME AND CAUSALITY: A CASE STUDY OF PAKISTAN
The Journal of Commerce, Vol. 4, No. 4 ISSN: 2218-8118, 2220-6043 Hailey College of Commerce, University of the Punjab, PAKISTAN MONEY, PRICES, INCOME AND CAUSALITY: A CASE STUDY OF PAKISTAN Dr. Nisar
More informationA Note on the Oil Price Trend and GARCH Shocks
MPRA Munich Personal RePEc Archive A Note on the Oil Price Trend and GARCH Shocks Li Jing and Henry Thompson 2010 Online at http://mpra.ub.uni-muenchen.de/20654/ MPRA Paper No. 20654, posted 13. February
More informationNexus among Output, Inflation and Private Sector Credit in Bangladesh 1 PN0710
Nexus among Output, Inflation and Private Sector Credit in Bangladesh 1 PN0710 Dr. Sayera Younus Abstract This study examines the relationship if any among economic growth (output), private sector credit
More informationGovernment expenditure and Economic Growth in MENA Region
Available online at http://sijournals.com/ijae/ Government expenditure and Economic Growth in MENA Region Mohsen Mehrara Faculty of Economics, University of Tehran, Tehran, Iran Email: mmehrara@ut.ac.ir
More informationComparative analysis of monetary and fiscal Policy: a case study of Pakistan
MPRA Munich Personal RePEc Archive Comparative analysis of monetary and fiscal Policy: a case study of Pakistan Syed Tehseen Jawaid and Imtiaz Arif and Syed Muhammad Naeemullah December 2010 Online at
More informationINFORMATION EFFICIENCY HYPOTHESIS THE FINANCIAL VOLATILITY IN THE CZECH REPUBLIC CASE
INFORMATION EFFICIENCY HYPOTHESIS THE FINANCIAL VOLATILITY IN THE CZECH REPUBLIC CASE Abstract Petr Makovský If there is any market which is said to be effective, this is the the FOREX market. Here we
More informationUCD CENTRE FOR ECONOMIC RESEARCH WORKING PAPER SERIES
UCD CENTRE FOR ECONOMIC RESEARCH WORKING PAPER SERIES 2006 Measuring the NAIRU A Structural VAR Approach Vincent Hogan and Hongmei Zhao, University College Dublin WP06/17 November 2006 UCD SCHOOL OF ECONOMICS
More informationTHE IMPACT OF IMPORT ON INFLATION IN NAMIBIA
European Journal of Business, Economics and Accountancy Vol. 5, No. 2, 207 ISSN 2056-608 THE IMPACT OF IMPORT ON INFLATION IN NAMIBIA Mika Munepapa Namibia University of Science and Technology NAMIBIA
More informationEstimation of Economic Growth Potential in Romania in Medium and Long Term
International Journal in Economics and Business Administration Volume III, Issue 3, 2015 pp. 3-12 Estimation of Economic Growth Potential in Romania in Medium and Long Term Constantin Duguleana, Liliana
More informationUsing Exogenous Changes in Government Spending to estimate Fiscal Multiplier for Canada: Do we get more than we bargain for?
Using Exogenous Changes in Government Spending to estimate Fiscal Multiplier for Canada: Do we get more than we bargain for? Syed M. Hussain Lin Liu August 5, 26 Abstract In this paper, we estimate the
More informationCommodity Price Changes and Economic Growth in Developing Countries
Journal of Business and Economics, ISSN 255-7950, USA October 205, Volume 6, No. 0, pp. 707-72 DOI: 0.534/jbe(255-7950)/0.06.205/005 Academic Star Publishing Company, 205 http://www.academicstar.us Commodity
More informationPRIVATE AND GOVERNMENT INVESTMENT: A STUDY OF THREE OECD COUNTRIES. MEHDI S. MONADJEMI AND HYEONSEUNG HUH* University of New South Wales
INTERNATIONAL ECONOMIC JOURNAL 93 Volume 12, Number 2, Summer 1998 PRIVATE AND GOVERNMENT INVESTMENT: A STUDY OF THREE OECD COUNTRIES MEHDI S. MONADJEMI AND HYEONSEUNG HUH* University of New South Wales
More informationTesting the Solow Growth Theory
Testing the Solow Growth Theory Dilip Mookherjee Ec320 Lecture 4, Boston University Sept 11, 2014 DM (BU) 320 Lect 4 Sept 11, 2014 1 / 25 RECAP OF L3: SIMPLE SOLOW MODEL Solow theory: deviates from HD
More informationForeign Direct Investment and Economic Growth in Some MENA Countries: Theory and Evidence
Loyola University Chicago Loyola ecommons Topics in Middle Eastern and orth African Economies Quinlan School of Business 1999 Foreign Direct Investment and Economic Growth in Some MEA Countries: Theory
More informationExchange Rate and Economic Performance - A Comparative Study of Developed and Developing Countries
IOSR Journal of Business and Management (IOSR-JBM) e-issn: 2278-487X. Volume 8, Issue 1 (Jan. - Feb. 2013), PP 116-121 Exchange Rate and Economic Performance - A Comparative Study of Developed and Developing
More informationCurrent Account Balances and Output Volatility
Current Account Balances and Output Volatility Ceyhun Elgin Bogazici University Tolga Umut Kuzubas Bogazici University Abstract: Using annual data from 185 countries over the period from 1950 to 2009,
More informationThe Empirical Study on the Relationship between Chinese Residents saving rate and Economic Growth
2017 4th International Conference on Business, Economics and Management (BUSEM 2017) The Empirical Study on the Relationship between Chinese Residents saving rate and Economic Growth Zhaoyi Xu1, a, Delong
More informationEffects of FDI on Capital Account and GDP: Empirical Evidence from India
Effects of FDI on Capital Account and GDP: Empirical Evidence from India Sushant Sarode Indian Institute of Management Indore Indore 453331, India Tel: 91-809-740-8066 E-mail: p10sushants@iimidr.ac.in
More informationAsian Economic and Financial Review EMPIRICAL TESTING OF EXCHANGE RATE AND INTEREST RATE TRANSMISSION CHANNELS IN CHINA
Asian Economic and Financial Review, 15, 5(1): 15-15 Asian Economic and Financial Review ISSN(e): -737/ISSN(p): 35-17 journal homepage: http://www.aessweb.com/journals/5 EMPIRICAL TESTING OF EXCHANGE RATE
More informationCurrency Substitution, Capital Mobility and Functional Forms of Money Demand in Pakistan
The Lahore Journal of Economics 12 : 1 (Summer 2007) pp. 35-48 Currency Substitution, Capital Mobility and Functional Forms of Money Demand in Pakistan Yu Hsing * Abstract The demand for M2 in Pakistan
More informationIMPACT OF MACROECONOMIC VARIABLES ON ECONOMIC GROWTH: EVIDENCE FROM PAKISTAN
IMPACT OF MACROECONOMIC VARIABLES ON ECONOMIC GROWTH: EVIDENCE FROM PAKISTAN *Dr. Amtul Hafeez, **Muhammad Taha ABSTRACT * Assistant Professors at National University of Modern Languages, Islamabad, **Graduate
More information1 Four facts on the U.S. historical growth experience, aka the Kaldor facts
1 Four facts on the U.S. historical growth experience, aka the Kaldor facts In 1958 Nicholas Kaldor listed 4 key facts on the long-run growth experience of the US economy in the past century, which have
More informationh Edition Economic Growth in a Cross Section of Countries
In the Name God Sharif University Technology Graduate School Management Economics Economic Growth in a Cross Section Countries Barro (1991) Navid Raeesi Fall 2014 Page 1 A Cursory Look I Are there any
More informationA Note on the Oil Price Trend and GARCH Shocks
A Note on the Oil Price Trend and GARCH Shocks Jing Li* and Henry Thompson** This paper investigates the trend in the monthly real price of oil between 1990 and 2008 with a generalized autoregressive conditional
More informationIS INFLATION VOLATILITY CORRELATED FOR THE US AND CANADA?
IS INFLATION VOLATILITY CORRELATED FOR THE US AND CANADA? C. Barry Pfitzner, Department of Economics/Business, Randolph-Macon College, Ashland, VA, bpfitzne@rmc.edu ABSTRACT This paper investigates the
More informationCURRENT ACCOUNT DEFICIT AND FISCAL DEFICIT A CASE STUDY OF INDIA
CURRENT ACCOUNT DEFICIT AND FISCAL DEFICIT A CASE STUDY OF INDIA Anuradha Agarwal Research Scholar, Dayalbagh Educational Institute, Agra, India Email: 121anuradhaagarwal@gmail.com ABSTRACT Purpose/originality/value:
More informationApplied Econometrics and International Development. AEID.Vol. 5-3 (2005)
PURCHASING POWER PARITY BASED ON CAPITAL ACCOUNT, EXCHANGE RATE VOLATILITY AND COINTEGRATION: EVIDENCE FROM SOME DEVELOPING COUNTRIES AHMED, Mudabber * Abstract One of the most important and recurrent
More informationON THE LONG-TERM MACROECONOMIC EFFECTS OF SOCIAL SPENDING IN THE UNITED STATES (*) Alfredo Marvão Pereira The College of William and Mary
ON THE LONG-TERM MACROECONOMIC EFFECTS OF SOCIAL SPENDING IN THE UNITED STATES (*) Alfredo Marvão Pereira The College of William and Mary Jorge M. Andraz Faculdade de Economia, Universidade do Algarve,
More informationMACROECONOMICS. Economic Growth II: Technology, Empirics, and Policy MANKIW. In this chapter, you will learn. Introduction
C H A P T E R 8 Economic Growth II: Technology, Empirics, and Policy MACROECONOMICS N. GREGORY MANKIW 2007 Worth Publishers, all rights reserved SIXTH EDITION PowerPoint Slides by Ron Cronovich In this
More informationThe relationship amongst public debt and economic growth in developing country case of Tunisia
The relationship amongst public debt and economic growth in developing country case of Tunisia FERHI Sabrine Department of economic, FSEGT Faculty of Economics and Management Tunis Campus EL MANAR 1 sabrineferhi@yahoo.fr
More informationAN EMPIRICAL ANALYSIS OF THE PUBLIC DEBT RELEVANCE TO THE ECONOMIC GROWTH OF THE USA
AN EMPIRICAL ANALYSIS OF THE PUBLIC DEBT RELEVANCE TO THE ECONOMIC GROWTH OF THE USA Petar Kurečić University North, Koprivnica, Trg Žarka Dolinara 1, Croatia petar.kurecic@unin.hr Marin Milković University
More informationCommentary: The Search for Growth
Commentary: The Search for Growth N. Gregory Mankiw For evaluating economic well-being, the single most important statistic about an economy is its income per capita. Income per capita measures how much
More informationEconomic Growth and Convergence across the OIC Countries 1
Economic Growth and Convergence across the OIC Countries 1 Abstract: The main purpose of this study 2 is to analyze whether the Organization of Islamic Cooperation (OIC) countries show a regional economic
More information202: Dynamic Macroeconomics
202: Dynamic Macroeconomics Solow Model Mausumi Das Delhi School of Economics January 14-15, 2015 Das (Delhi School of Economics) Dynamic Macro January 14-15, 2015 1 / 28 Economic Growth In this course
More informationDynamic Linkages between Newly Developed Islamic Equity Style Indices
ISBN 978-93-86878-06-9 9th International Conference on Business, Management, Law and Education (BMLE-17) Kuala Lumpur (Malaysia) Dec. 14-15, 2017 Dynamic Linkages between Newly Developed Islamic Equity
More informationNotes on classical growth theory (optional read)
Simon Fraser University Econ 855 Prof. Karaivanov Notes on classical growth theory (optional read) These notes provide a rough overview of "classical" growth theory. Historically, due mostly to data availability
More informationThi-Thanh Phan, Int. Eco. Res, 2016, v7i6, 39 48
INVESTMENT AND ECONOMIC GROWTH IN CHINA AND THE UNITED STATES: AN APPLICATION OF THE ARDL MODEL Thi-Thanh Phan [1], Ph.D Program in Business College of Business, Chung Yuan Christian University Email:
More informationForecasting Foreign Exchange Rate by using ARIMA Model: A Case of VND/USD Exchange Rate
Forecasting Foreign Exchange Rate by using ARIMA Model: A Case of VND/USD Exchange Rate Tran Mong Uyen Ngan School of Economics, Huazhong University of Science and Technology (HUST),Wuhan. P.R. China Abstract
More informationThe source of real and nominal exchange rate fluctuations in Thailand: Real shock or nominal shock
MPRA Munich Personal RePEc Archive The source of real and nominal exchange rate fluctuations in Thailand: Real shock or nominal shock Binh Le Thanh International University of Japan 15. August 2015 Online
More informationFiscal Policy and Economic Growth Relationship in Nigeria
International Journal of Business and Social Science Vol. 2 No. 17 www.ijbssnet.com 244 Fiscal Policy and Economic Growth Relationship in Nigeria Sikiru Jimoh Babalola (Corresponding Author) Lecturer Department
More informationESTIMATING MONEY DEMAND FUNCTION OF BANGLADESH
BRAC University Journal, vol. VIII, no. 1&2, 2011, pp. 31-36 ESTIMATING MONEY DEMAND FUNCTION OF BANGLADESH Md. Habibul Alam Miah Department of Economics Asian University of Bangladesh, Uttara, Dhaka Email:
More informationComposition of Foreign Capital Inflows and Growth in India: An Empirical Analysis.
Composition of Foreign Capital Inflows and Growth in India: An Empirical Analysis. Author Details: Narender,Research Scholar, Faculty of Management Studies, University of Delhi. Abstract The role of foreign
More informationForeign Direct Investment & Economic Growth in BRICS Economies: A Panel Data Analysis
Foreign Direct Investment & Economic Growth in BRICS Economies: A Panel Data Analysis Gaurav Agrawal The research paper is an attempt to examine the relationship between foreign direct investment (FDI)
More informationTHE EFFECTS OF THE EU BUDGET ON ECONOMIC CONVERGENCE
THE EFFECTS OF THE EU BUDGET ON ECONOMIC CONVERGENCE Eva Výrostová Abstract The paper estimates the impact of the EU budget on the economic convergence process of EU member states. Although the primary
More informationChapter 4. Economic Growth
Chapter 4 Economic Growth When you have completed your study of this chapter, you will be able to 1. Understand what are the determinants of economic growth. 2. Understand the Neoclassical Solow growth
More informationLong Run Money Neutrality: The Case of Guatemala
Long Run Money Neutrality: The Case of Guatemala Frederick H. Wallace Department of Management and Marketing College of Business Prairie View A&M University P.O. Box 638 Prairie View, Texas 77446-0638
More informationPersonal income, stock market, and investor psychology
ABSTRACT Personal income, stock market, and investor psychology Chung Baek Troy University Minjung Song Thomas University This paper examines how disposable personal income is related to investor psychology
More informationECONOMIC CONVERGENCE AND THE GLOBAL CRISIS OF : THE CASE OF BALTIC COUNTRIES AND UKRAINE
ISSN 1822-8011 (print) ISSN 1822-8038 (online) INTELEKTINĖ EKONOMIKA INTELLECTUAL ECONOMICS 2014, Vol. 8, No. 2(20), p. 135 146 ECONOMIC CONVERGENCE AND THE GLOBAL CRISIS OF 2008-2012: THE CASE OF BALTIC
More informationUncertainty and the Transmission of Fiscal Policy
Available online at www.sciencedirect.com ScienceDirect Procedia Economics and Finance 32 ( 2015 ) 769 776 Emerging Markets Queries in Finance and Business EMQFB2014 Uncertainty and the Transmission of
More informationIMPACT OF INFLATION ON UNEMPLOYMENT IN THE REPUBLIC OF MACEDONIA
Journal of Business Paradigms Vol 1 No 1, 2016 IMPACT OF INFLATION ON UNEMPLOYMENT IN THE REPUBLIC OF MACEDONIA Elsana Aqifi 1 State University of Tetovo Raimonda Duka University of Tirana ABSTRACT Unemployment
More informationTHE IMPACT OF FDI, EXPORT, ECONOMIC GROWTH, TOTAL FIXED INVESTMENT ON UNEMPLOYMENT IN TURKEY. Ismail AKTAR Latif OZTURK Nedret DEMIRCI
THE IMPACT OF FDI, EXPORT, ECONOMIC GROWTH, TOTAL FIXED INVESTMENT ON UNEMPLOYMENT IN TURKEY Ismail AKTAR Latif OZTURK Nedret DEMIRCI Kırıkkale University, TURKEY Abstract The impact of Foreign Direct
More informationCROATIA S EU CONVERGENCE REPORT: REACHING AND SUSTAINING HIGHER RATES OF ECONOMIC GROWTH, Document of the World Bank, June 2009, pp.
CROATIA S EU CONVERGENCE REPORT: REACHING AND SUSTAINING HIGHER RATES OF ECONOMIC GROWTH, Document of the World Bank, June 2009, pp. 208 Review * The causes behind achieving different economic growth rates
More informationAn Empirical Study on the Determinants of Dollarization in Cambodia *
An Empirical Study on the Determinants of Dollarization in Cambodia * Socheat CHIM Graduate School of Economics, Osaka University 1-7 Machikaneyama, Toyonaka, Osaka, 560-0043, Japan E-mail: chimsocheat3@yahoo.com
More informationA COMPARATIVE ANALYSIS OF REAL AND PREDICTED INFLATION CONVERGENCE IN CEE COUNTRIES DURING THE ECONOMIC CRISIS
A COMPARATIVE ANALYSIS OF REAL AND PREDICTED INFLATION CONVERGENCE IN CEE COUNTRIES DURING THE ECONOMIC CRISIS Mihaela Simionescu * Abstract: The main objective of this study is to make a comparative analysis
More informationSpending for Growth: An Empirical Evidence of Thailand
Applied Economics Journal 17 (2): 27-44 Copyright 2010 Center for Applied Economics Research ISSN 0858-9291 Spending for Growth: An Empirical Evidence of Thailand Jirawat Jaroensathapornkul* School of
More informationA study on the long-run benefits of diversification in the stock markets of Greece, the UK and the US
A study on the long-run benefits of diversification in the stock markets of Greece, the and the US Konstantinos Gillas * 1, Maria-Despina Pagalou, Eleni Tsafaraki Department of Economics, University of
More informationTrade Openness, Economic Growth and Unemployment Reduction in Arab Region
International Journal of Economics and Financial Issues ISSN: 2146-4138 available at http: www.econjournals.com International Journal of Economics and Financial Issues, 2018, 8(1), 179-183. Trade Openness,
More informationRE-EXAMINE THE INTER-LINKAGE BETWEEN ECONOMIC GROWTH AND INFLATION:EVIDENCE FROM INDIA
6 RE-EXAMINE THE INTER-LINKAGE BETWEEN ECONOMIC GROWTH AND INFLATION:EVIDENCE FROM INDIA Pratiti Singha 1 ABSTRACT The purpose of this study is to investigate the inter-linkage between economic growth
More informationCAN MONEY SUPPLY PREDICT STOCK PRICES?
54 JOURNAL FOR ECONOMIC EDUCATORS, 8(2), FALL 2008 CAN MONEY SUPPLY PREDICT STOCK PRICES? Sara Alatiqi and Shokoofeh Fazel 1 ABSTRACT A positive causal relation from money supply to stock prices is frequently
More informationInvestment in Physical Capital, Investment in Health and Economic Growth in China
Investment in Physical Capital, Investment in Health and Economic Growth in China AUTHORS ARTICLE INFO JOURNAL FOUNDER Xie Xiaoqing Xie Xiaoqing (2005). Investment in Physical Capital, Investment in Health
More informationHedging Effectiveness of Currency Futures
Hedging Effectiveness of Currency Futures Tulsi Lingareddy, India ABSTRACT India s foreign exchange market has been witnessing extreme volatility trends for the past three years. In this context, foreign
More informationTHE REACTION OF THE WIG STOCK MARKET INDEX TO CHANGES IN THE INTEREST RATES ON BANK DEPOSITS
OPERATIONS RESEARCH AND DECISIONS No. 1 1 Grzegorz PRZEKOTA*, Anna SZCZEPAŃSKA-PRZEKOTA** THE REACTION OF THE WIG STOCK MARKET INDEX TO CHANGES IN THE INTEREST RATES ON BANK DEPOSITS Determination of the
More informationMONEY SUPPLY ROLE IN ECONOMIC AND INDUSTRIAL GROWTH: THE CASE OF JORDAN ( )
MONEY SUPPLY ROLE IN ECONOMIC AND INDUSTRIAL GROWTH: THE CASE OF JORDAN (1990-2010) Jaber Mohammed Al-Bdour, PhD Princess Sumaya University for Technology Amman, Jordan Abdul Ghafoor Ahmad, PhD Princess
More informationMONEY, PRICES AND THE EXCHANGE RATE: EVIDENCE FROM FOUR OECD COUNTRIES
money 15/10/98 MONEY, PRICES AND THE EXCHANGE RATE: EVIDENCE FROM FOUR OECD COUNTRIES Mehdi S. Monadjemi School of Economics University of New South Wales Sydney 2052 Australia m.monadjemi@unsw.edu.au
More informationThe Impact of Fiscal Space on Economic Growth in Egypt
The Impact of Fiscal Space on Economic Growth in Egypt Engy Raouf Abdel Fattah Assistant Professor Department of Economics and Foreign Trade Faculty of Commerce and Business Administration Helwan University
More informationEstimating Egypt s Potential Output: A Production Function Approach
MPRA Munich Personal RePEc Archive Estimating Egypt s Potential Output: A Production Function Approach Osama El-Baz Economist, osamaeces@gmail.com 20 May 2016 Online at https://mpra.ub.uni-muenchen.de/71652/
More informationForeign exchange rate and the Hong Kong economic growth
From the SelectedWorks of John Woods Winter October 3, 2017 Foreign exchange rate and the Hong Kong economic growth John Woods Brian Hausler Kevin Carter Available at: https://works.bepress.com/john-woods/1/
More informationResponse of Output Fluctuations in Costa Rica to Exchange Rate Movements and Global Economic Conditions and Policy Implications
Response of Output Fluctuations in Costa Rica to Exchange Rate Movements and Global Economic Conditions and Policy Implications Yu Hsing (Corresponding author) Department of Management & Business Administration,
More informationTHE CORRELATION BETWEEN VALUE ADDED TAX AND ECONOMIC GROWTH IN ROMANIA
THE CORRELATION BETWEEN VALUE ADDED TAX AND ECONOMIC GROWTH IN ROMANIA Ana-Maria Urîțescu, PhD student Bucharest University of Economic Studies Email: ana.uritescu@fin.ase.ro Abstract: The study aims to
More information5. If capital lasts an average of 25 years, the depreciation rate is percent per year. A) 25 B) 5 C) 4 D) 2.5
1. The production function y = f(k) means: A) labor is not a factor of production. B) output per worker is a function of labor productivity. C) output per worker is a function of capital per worker. D)
More informationTransmission in India:
Asymmetry in Monetary Policy Transmission in India: Aggregate and Sectoral Analysis Brajamohan Misra Officer in Charge Department of Economic and Policy Research Reserve Bank of India VI Meeting of Open
More informationA causal relationship between foreign direct investment, economic growth and export for Central and Eastern Europe Zuzana Gallová 1
A causal relationship between foreign direct investment, economic growth and export for Central and Eastern Europe Zuzana Gallová 1 1 Introduction Abstract. Foreign direct investment is generally considered
More informationThe Impact of Tax Policies on Economic Growth: Evidence from Asian Economies
The Impact of Tax Policies on Economic Growth: Evidence from Asian Economies Ihtsham ul Haq Padda and Naeem Akram Abstract Tax based fiscal policies have been regarded as less policy tool to overcome the
More informationDynamics Linkages among Money, Output, Interest Rate and Price: The Case in Malaysia
Dynamics Linkages among Money, Output, Interest Rate and Price: The Case in Malaysia Ai-Yee Ooi Labuan International School of International Business and Finance Universiti Malaysia Sabah, 8799 Labuan,
More informationAn Empirical Analysis of the Relationship between Macroeconomic Variables and Stock Prices in Bangladesh
Bangladesh Development Studies Vol. XXXIV, December 2011, No. 4 An Empirical Analysis of the Relationship between Macroeconomic Variables and Stock Prices in Bangladesh NASRIN AFZAL * SYED SHAHADAT HOSSAIN
More informationBusiness Cycles in Pakistan
International Journal of Business and Social Science Vol. 3 No. 4 [Special Issue - February 212] Abstract Business Cycles in Pakistan Tahir Mahmood Assistant Professor of Economics University of Veterinary
More informationTHE CONVERGENCE OF UNEMPLOYMENT RATE IN THE EUROPEAN UNION
THE CONVERGENCE OF UNEMPLOYMENT RATE IN THE EUROPEAN UNION Mihaela Simionescu, PhD Senior Researcher i Institute for Economic Forecasting of the Romanian Academy E-mail: mihaela_mb1@yahoo.com (Received
More informationApplied Economics. Growth and Convergence 1. Economics Department Universidad Carlos III de Madrid
Applied Economics Growth and Convergence 1 Economics Department Universidad Carlos III de Madrid 1 Based on Acemoglu (2008) and Barro y Sala-i-Martin (2004) Outline 1 Stylized Facts Cross-Country Dierences
More informationBESSH-16. FULL PAPER PROCEEDING Multidisciplinary Studies Available online at
FULL PAPER PROEEDING Multidisciplinary Studies Available online at www.academicfora.com Full Paper Proceeding BESSH-2016, Vol. 76- Issue.3, 15-23 ISBN 978-969-670-180-4 BESSH-16 A STUDY ON THE OMPARATIVE
More informationOn the Importance of Labour Productivity Growth: Portugal vs. Ireland
UNIVERSITE DE LAUSANNE ECOLE DES HAUTES ETUDES COMMERCIALES Macroeconomic Modelling On the Importance of Labour Productivity Growth: Portugal vs. Ireland Cátia Felisberto July 2003 Professor: Jean-Christian
More informationLiquidity Matters: Money Non-Redundancy in the Euro Area Business Cycle
Liquidity Matters: Money Non-Redundancy in the Euro Area Business Cycle Antonio Conti January 21, 2010 Abstract While New Keynesian models label money redundant in shaping business cycle, monetary aggregates
More informationAIB-MENA 2016 Paper Development Workshop 31 August-1 September, 2016, Dubai, UAE. Recent evidence on the oil price shocks on GCC stock markets
AIB-MENA 2016 Paper Development Workshop 31 August-1 September, 2016, Dubai, UAE Recent evidence on the oil price shocks on GCC stock markets Suzanna El Massah College of Business Zayed University, UAE
More informationStudy of Relationship Between USD/INR Exchange Rate and BSE Sensex from
DOI : 10.18843/ijms/v5i3(1)/13 DOIURL :http://dx.doi.org/10.18843/ijms/v5i3(1)/13 Study of Relationship Between USD/INR Exchange Rate and BSE Sensex from 2008-2017 Hardeepika Singh Ahluwalia, Assistant
More informationThe Dynamics between Government Debt and Economic Growth in South Asia: A Time Series Approach
The Empirical Economics Letters, 15(9): (September 16) ISSN 1681 8997 The Dynamics between Government Debt and Economic Growth in South Asia: A Time Series Approach Nimantha Manamperi * Department of Economics,
More informationTopic 2. Productivity, technological change, and policy: macro-level analysis
Topic 2. Productivity, technological change, and policy: macro-level analysis Lecture 3 Growth econometrics Read Mankiw, Romer and Weil (1992, QJE); Durlauf et al. (2004, section 3-7) ; or Temple, J. (1999,
More informationDeep Determinants. Sherif Khalifa. Sherif Khalifa () Deep Determinants 1 / 65
Deep Determinants Sherif Khalifa Sherif Khalifa () Deep Determinants 1 / 65 Sherif Khalifa () Deep Determinants 2 / 65 There are large differences in income per capita across countries. The differences
More informationAn Estimate of the Effect of Currency Unions on Trade and Growth* First draft May 1; revised June 6, 2000
An Estimate of the Effect of Currency Unions on Trade and Growth* First draft May 1; revised June 6, 2000 Jeffrey A. Frankel Kennedy School of Government Harvard University, 79 JFK Street Cambridge MA
More informationEFFECTS OF TRADE OPENNESS AND ECONOMIC GROWTH ON THE PRIVATE SECTOR INVESTMENT IN SYRIA
EFFECTS OF TRADE OPENNESS AND ECONOMIC GROWTH ON THE PRIVATE SECTOR INVESTMENT IN SYRIA Adel Shakeeb Mohsen, PhD Student Universiti Sains Malaysia, Malaysia Introduction Motivating private sector investment
More information