scholarly journals Connection between Saving, Investment and Economic Growth of India

2020 ◽  
Vol 7 (4) ◽  
pp. 63
Author(s):  
Swami Prasad Saxena ◽  
Akanksha Singh Fouzdar
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
Positive Relationship ◽  
Granger Causality Test ◽  
Cointegration Analysis ◽  
Domestic Saving ◽  
Causality Test ◽  
Long Run ◽  
Directed Growth ◽  
The Relationship

This paper scrutinizes the relationship between gross domestic saving, gross capital formation and economic growth in India during a period from 1992 to 2018. The results of cointegration analysis reveal that there is a long-run relationship between selected variables; however, the observations from the results of the Granger causality test indicate a positive relationship between saving, investment and economic growth in India. The findings explicate that saving and investment directed growth is coming from the private sector.

The relationship between financial development and economic growth in Eswatini (formerly Swaziland)

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Siphe-okuhle Fakudze ◽  
Asrat Tsegaye ◽  
Kin Sibanda
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Financial Development ◽  
Granger Causality Test ◽  
Causality Test ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
The Relationship

PurposeThe paper examined the relationship between financial development and economic growth for the period 1996 to 2018 in Eswatini.Design/methodology/approachThe Autoregressive Distributed Lag bounds test (ARDL) was employed to determine the long-run and short-run dynamics of the link between the variables of interest. The Granger causality test was also performed to establish the direction of causality between financial development and economic growth.FindingsThe ARDL results revealed that there is a long-run relationship between financial development and economic growth. The Granger causality test revealed bidirectional causality between money supply and economic growth, and unidirectional causality running from economic growth to financial development. The results highlight that economic growth exerts a positive and significant influence on financial development, validating the demand following hypothesis in Eswatini.Practical implicationsPolicymakers should formulate policies that aims to engineer more economic growth. The policies should strike a balance between deploying funds necessary to stimulate investment and enhancing productivity in order to enliven economic growth in Eswatini.Originality/valueThe study investigates the finance-growth linkage using time series analysis. It determines the long-run and short-run dynamics of this relationship and examines the Granger causality outcomes.

scholarly journals Examining the Causal Relationship between Private Sector Credit Extended and Economic Growth in Namibia

2019 ◽  
Vol 11 (2(J)) ◽  
pp. 23-29
Author(s):  
Andreas . ◽  
J P S Sheefeni
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
Granger Causality ◽  
Granger Causality Test ◽  
Test Results ◽  
Causality Test ◽  
Long Run ◽  
Integration Test ◽  
Stationarity Test ◽  
Lending Rates

The paper examined causality between Private Sector Credit Extension (PSCE) and Economic growth using quarterly data for the period 2000:Q1-2017:Q4, in Namibia. The variables employed were Gross Domestic Product (GDP), Private Sector Credit Extended, Broad Money Supply (M2) and lending rates. The study tested for stationarity in order to determine the order of integration. Furthermore, a co-integration test was conducted on different sets of variables to establish the long run relationship. Granger causality test was also conducted to establish the direction of the relationships between the variables. The results for the stationarity test showed a combination of different orders of integration. The co-integration test revealed a stable long-run relationship among the variables. The Granger causality test results revealed one-directional causality running from PSCE to GDP. Therefore, one can conclude that that change in private sector credit extended can help predict economic growth.

scholarly journals Health Expenditure, Institutions, and Economic Growth: Insights From Selected MENA Countries

2021 ◽  
Author(s):  
Bashir Umar Faruk ◽  
Mohammad Imdadul Haque ◽  
Mohammad Rumzi Tausif ◽  
Md Riyazuddin Khan
Keyword(s):  
Economic Growth ◽  
Health Expenditure ◽  
Institutional Quality ◽  
Granger Causality Test ◽  
Causality Test ◽  
Mena Countries ◽  
Health Investments ◽  
Long Run ◽  
The Relationship

Abstract Health expenditure plays an important role in nation-building. Moreover, the current wave of the COVID-19 pandemic highlights the importance of health investments in maintaining a healthier economy across the world. Quite a significant number of empirical research undertaken on the relationship between health expenditure and economic growth produce mixed results. The study plans to study the relationship between health expenditure and economic growth and the role of institutions in causing health expenditure to promote growth. The study analyses this relationship using the case of seven selected MENA countries between 2000 and 2017. The Pedroni cointegration test reports a long-run cointegrating relationship between the variables. However, the Granger Causality test finds no casual relationships between health expenditure and economic growth. The study further applies panel OLS, FMOLS, and DOLS, and the result from all three models shows that health expenditure does not directly contribute to higher economic growth in the MENA countries. The study argues that this is possibly due to inadequate institutional quality. However, it is understandable that there must be indirect effects of health expenditure on economic growth through better human capital. Finally, the study discusses policy options to improve institutional quality indicators to tap the benefits and contribute positively to economic growth in the region.

scholarly journals Econometric analysis of oil consumption and economic growth in Nepal

2012 ◽  
pp. 135-143
Author(s):  
Tara Prasad Bhusal
Keyword(s):  
Economic Growth ◽  
Gross Domestic Product ◽  
Granger Causality ◽  
Electricity Generation ◽  
Granger Causality Test ◽  
Annual Data ◽  
Oil Consumption ◽  
Causality Test ◽  
Long Run ◽  
The Relationship

Oil is one of the main inputs for many sectors like transportation, manufacturing, electricity generation and others. Oil is also very important for the economic growth of Nepal. This paper examines the short and long-run causality between oil consumption and Gross Domestic Product for Nepal using annual data covering the period of 1975-2009. Granger causality test is employed to analyse the relationship between economic growth and oil consumption variables with same order of integration (I (1)). In this study is found that there exists bi-directional Granger causality between oil consumption and economic growth in the short and long run.Key words: Oilconsumption; Economic Growth; Causality; Co-integrationEconomic Journal of Development Issues Vol. 11 & 12 No. 1-2 (2010) Combined IssuePage: 135-143Uploaded date: 10 April, 2012

ANALYSIS OF THE LONG-RUN RELATIONSHIP BETWEEN ECONOMIC GROWTH AND BANK CREDIT AVAILABILITY IN SOUTH AFRICA.

2017 ◽  
Vol 1 (1) ◽  
pp. 1
Author(s):  
Goodman Chakanyuka
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Business Cycles ◽  
Granger Causality ◽  
Granger Causality Test ◽  
Bank Credit ◽  
Causality Test ◽  
Credit Growth ◽  
Long Run ◽  
The Relationship

Purpose: The purpose of this study was to Analyze of the Relationship between Business Cycles and Bank Credit Extension: Evidence from South Africa. The study sought establish the direction of causality between economic growth and bank credit growth in South AfricaMethodology: The econometric methodology is used to augment results of the survey study. Granger causality test technique is applied to the variables of interest to test for direction of causation between variables. The study uses quarterly data for the period of 1980: Q1 to 2013: Q4. Business cycles are determined and measured by Gross Domestic Product at market prices while bank-granted credit is proxied by credit extension to the private sector.Results: Results revealed that, that there is a stable long-run relationship between macro-economic business cycles and real credit growth in South Africa. The results show that economic growth significantly causes and stimulates bank credit. The Granger causality test provides evidence of unidirectional causal relationship with direction from economic growth to credit extension for South Africa. The study results indicate that the case for demand-following hypothesis is stronger than supply-leading hypothesis in South Africa. Economic growth spurs credit market development in South Africa.Unique contribution to theory, practice and policy: It proposes practical policy prescriptions to address challenges currently facing South Africa. The other major contribution of this study is that it shall open new avenues for further research on finding causality of the relationship between various proxies of economic growth and financial development adopting the VAR framework

scholarly journals Poverty and Economic Growth in Mexico

2018 ◽  
Vol 7 (10) ◽  
pp. 183 ◽  
Author(s):  
Jorge Garza-Rodriguez
Keyword(s):  
Economic Growth ◽  
Poverty Reduction ◽  
Cointegration Analysis ◽  
Causality Test ◽  
Cross Sectional ◽  
Vector Error Correction ◽  
Long Run ◽  
Short Run ◽  
Development Literature ◽  
The Relationship

The relationship between poverty and economic growth has been widely discussed in the economic development literature during the past few decades. However, most of this research has been based on cross-sectional studies and very few studies have used time-series techniques to analyze this important issue. At the same time, there are also only a few studies analyzing this issue for the case of Mexico. Therefore, the objective of this paper was to analyze the relationship between poverty and economic growth in Mexico, using a cointegration analysis with structural change for the period 1960–2016. The Gregory-Hansen cointegration test confirmed the existence of a long-term equilibrium relationship between poverty reduction and economic growth, both in the short run and in the long run. Using a Vector Error Correction Model (VECM), we find that, in the long run, a 1% increase in economic growth leads to a 2.4% increase in per capita consumption (and therefore poverty reduction). This estimate is similar to those obtained in other studies for the case of Mexico and for other developing countries. Also, using the Granger causality test, it was found that there is a bidirectional causality relationship between poverty reduction and economic growth in Mexico.

An Econometric Analysis of Relationship between Economic Growth and Petroleum Consumption in India

2019 ◽  
Vol 8 (2) ◽  
pp. 118-127
Author(s):  
Musavir Ul Habib
Keyword(s):  
Economic Growth ◽  
Environmental Sustainability ◽  
Environmental Planning ◽  
Granger Causality Test ◽  
Causality Test ◽  
The Sustainable Development ◽  
Long Run ◽  
Petroleum Resources ◽  
Short Run ◽  
The Relationship

The objective of this study is to examine empirically the relationship between the petroleum consumption which is a non-renewable and fast-depleting natural resource and economic growth for India for the period 1980–2014. The results obtained thereof act as the tools for the proper resource management and the environmental planning for sustainability. The study found that economic growth and petroleum consumption are cointegrated and hence there is a long-run relationship between the petroleum consumption and economic growth; conversely speaking, petroleum consumption has a significant impact on the economic growth of India in the long run. So the reduction of petroleum consumption if undertaken will have the serious repercussions on economic growth of India in the long run. The Granger causality test confirms that there is unidirectional causality running from petroleum consumption to economic growth in the short run but not vice versa. Hence, the study found that to achieve the dual goal of economic growth and environmental sustainability, the policymakers should focus on conserving the non-renewable petroleum resources. But at the same time, the investment in the renewable energy sector ought to be pursued so as to maintain the same level of energy consumption as well as achieve the sustainable development.

scholarly journals The Relationship between Financial Development and Energy Consumption in South Africa

Economies ◽  
2021 ◽  
Vol 9 (4) ◽  
pp. 158
Author(s):  
Palesa Milliscent Lefatsa ◽  
Kin Sibanda ◽  
Rufaro Garidzirai
Keyword(s):  
South Africa ◽  
Energy Consumption ◽  
Private Sector ◽  
Granger Causality ◽  
Financial Development ◽  
Granger Causality Test ◽  
Causality Test ◽  
Long Run ◽  
Short Run ◽  
The Relationship

This paper examines the nexus between financial development and energy consumption in South Africa. To determine the long run and short run relationship between financial development and energy consumption in South Africa, the paper uses an Auto Regressive Distributed Lag bounds test (ARDL) and Granger causality test to establish the type of correlation between 1980 and 2018. ARDL bounds testing method offers concrete long-run estimates and t-statistics as it is flexible whether the adopted variables are I(0) or I(1).The study used per capita (kilogram, kg of oil equivalent) to measure total energy consumption, domestic credit to the private sector (percentage of gross domestic product, GDP) to measure financial development, real GDP growth (to capture economic growth), industrial value added (percentage of GDP) to measure industrialization, and urban population (percentage of total population) to capture urbanization. Results from ARDL showed that the relationship between financial development and energy consumption is positive in nature both in short-run and long-run. Granger causality test results revealed unidirectional causality from financial development to energy consumption. Policymakers need to formulate policy reforms that channels more credit to private sector development in order to bolster more energy use in South Africa. There ought to be proper balance between financial development and energy consumption to avoid electricity crisis.

Financial Deepening, Financial Intermediation and Nigerian Economic Growth: Time Variant Analysis

2019 ◽  
pp. 60-73
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Private Sector ◽  
Money Supply ◽  
Domestic Product ◽  
Financial Deepening ◽  
Causality Test ◽  
Real Gross Domestic Product ◽  
Long Run

This study examines financial deepening, financial intermediation and Nigerian economic growth. The main purpose is to examine the relationship between financial deepening and Nigerian economic growth while the specific objectives are to examine the impact of interest rate, capital market development, rational savings, credit to private sector and broad money supply on the growth of Nigerian. Secondary data of the variables were sourced from the publications of Central Bank of Nigeria (CBN) from 1981-2017. Nigerian Real Gross Domestic Product (RGDP) was used as dependent variable while Broad money supply (M2), Credit to Private Sector (CPS), National Savings (NS), Capital Market Capitalization (CAMP) and Interest Rate (INTR) was used as independent variables. Multiple regressions with E-view statistical package were used as data analysis techniques. Cointegration test, Augmented Dickey Fuller Unit Root Test, Granger causality test was used to determine the relationship between the variable in the long-run and short-run. R2, F – statistics and β Coefficients were used to determine the extent to which the independent variable affects the dependent variable. It was found from the regression result that Broad Money Supply, credit to private sector have position effect on the growth of Nigerian Real Gross Domestic Product while National Savings, Capitalization and Interest Rate on Nigeria Real Gross Domestic Product. The co-integration test revealed presence of long-run relationship among the variables, the stationary test indicated stationarity of the variables at level. The Granger Causality Test found bi – variant relationship from the dependent to the independent and from the independent to the dependent variables. The regression summary found 99.0% explained variation, 560.5031, F – statistics and probability of 0.00000. From the above, the study concludes that financial deepening has significant relationships with Nigerian economic growth. We recommend that government and the financial sector operators should make policies that will further deepen the functions of the financial system to enhance Nigerian economic growth.

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