Threshold effects of inflation on economic growth: Evidence from a static threshold analysis for 18 developed economies

This paper examines the relation between regulation and economic performance in the context of 23 developed economies. We apply a generalisation of the growth accounting model popularized by Solow to data over the 2002-2008 period. In the model, we assume that regulatory quality impacts on growth via its impact on total factor productivity growth. We look at three measures of regulatory quality, all of which are based on the set of governance indicators developed by the World Bank. The model is estimated using a fixed effects as well as a random effects estimation strategy. Our findings do lend support for the view that the better the quality of regulation, the higher rate of economic growth, but find no support for the view that the strength of the positive growth impact is stronger for countries that rank relatively lower on the regulatory quality scale.

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The Impact of Real Exchange Rate Undervaluation on Economic Growth: Evidence from Panel Cointegration Approach

10.21203/rs.3.rs-16924/v1 ◽

2020 ◽

Author(s):

Mehdi Seraj ◽

Cagay Coskuner ◽

Seyi Saint Akadiri ◽

Negar Bahadori

Keyword(s):

Economic Growth ◽

Exchange Rate ◽

Real Exchange Rate ◽

Developing Economies ◽

Panel Cointegration ◽

Least Square ◽

Ordinary Least Square ◽

Developed Economies ◽

Periodic Data ◽

The Impact

Abstract This study revisited Dani Rodrik (2008) work on real exchange rate undervaluation and economic growth by using the Fully Modified Ordinary Least Square (FMOLS) and Dynamic Ordinary Least Square (DOLS). This research, to the best of authors' knowledge, is the first to use FMOLS and DOLS approach to empirically evaluate Rodrik work on the real exchange rate and economic growth using a Panel periodic data (six sets of five years) of 82 countries throughout 1990 to 2018. We used the Balassa Samuelson method to estimate the predicted real exchange rate and real exchange rate undervaluation. Finally, the study is in support of Rodrik conclusion that, real exchange undervaluation has a significant impact on the economic growth of the developing economies and statistically insignificant in the developed economies.

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Fiscal consolidation in developed and emerging economies

Nova Economia ◽

10.1590/0103-6351/3550 ◽

2015 ◽

Vol 25 (spe) ◽

pp. 835-861

Author(s):

Paulo André Camuri ◽

Frederico G. Jayme Jr. ◽

Ana Maria Hermeto

Keyword(s):

Economic Growth ◽

Emerging Economies ◽

Standard Errors ◽

Economic Policies ◽

Fiscal Consolidation ◽

Transition Path ◽

Causality Test ◽

Developed Economies ◽

Fiscal Space ◽

Main Determinants

Abstract: The debate regarding fiscal policy has given support to the formulation of an economic policy based on control of indebtedness and in persecution of public savings, acting as important support for the economic growth. This paper presents evidence that counter acts this theory of expansionary austerity. A set of panel data regressions is estimated - through Driscoll & Kraay’s, FGLS, panel corrected standard errors, and SUR estimators and the causality test approach proposed by Kónya (2006) - in search of robust inference related to the main determinants that encompasses the fiscal framework. Our conclusion is that the empirical evidence - using a set of 20 developed economies and other of 24 emerging economies - suggests that identical economic policies for different countries might conduce to results that are opposite to the desired outcome. Notwithstanding the adverse effects associated to explosive debt path, the search for “fiscal space” should be determined essentially by a pro-growth agenda. This is particularly important for the emerging economies facing the transition path challenges.

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Size of government and economic growth: A nonlinear analysis

Economic Annals ◽

10.2298/eka1294007h ◽

2012 ◽

Vol 57 (194) ◽

pp. 7-30 ◽

Cited By ~ 9

Author(s):

Shanaka Herath

Keyword(s):

Economic Growth ◽

Sri Lanka ◽

Polynomial Regression ◽

Developing Economies ◽

Government Expenditure ◽

Analytical Framework ◽

Optimal Level ◽

Size Of Government ◽

Developed Economies ◽

Productive Output

The new growth theory establishes, among other things, that government expenditure can manipulate the economic growth of a country. This study attempts to explain whether government expenditure increases or decreases economic growth in the context of Sri Lanka. Results obtained employing a productive output series and applying an analytical framework based on second degree polynomial regression are generally consistent with previous findings: government expenditure and economic growth are positively correlated; excessive government expenditure is negatively correlated with economic growth; and investment promotes growth. In a separate section, the article examines Armey?s idea of a quadratic curve that explains the level of government expenditure in an economy and the corresponding level of economic growth [Armey, D. (1995). The Freedom Revolution. Washington, D.C.: Regnery Publishing Co.]. The findings confirm the possibility of constructing the Armey curve for Sri Lanka, and it estimates the optimal level of government expenditure to be approximately 27%. This article adds to the literature indicating that the Armey curve is a reality not only for developed economies, but also for developing economies.

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