scholarly journals Debt Policy and Economic Growth in a Small Open Economy Model with Productive Government Spending

2010 ◽  
Author(s):  
Koichi Futagami ◽  
Takeo Hori ◽  
Ryoji Ohdoi
Keyword(s):  
Economic Growth ◽  
Open Economy ◽  
Government Spending ◽  
Small Open Economy ◽  
Economy Model ◽  
Productive Government Spending ◽  
Debt Policy

HABIT FORMATION AND GOVERNMENT SPENDING IN A SMALL OPEN ECONOMY

2003 ◽  
Vol 7 (3) ◽  
pp. 407-423 ◽  
Author(s):  
Cem Karayalçin
Keyword(s):  
Fiscal Policy ◽  
General Equilibrium ◽  
Current Account ◽  
Open Economy ◽  
Equilibrium Model ◽  
Government Spending ◽  
Time Preference ◽  
Small Open Economy ◽  
Long Run ◽  
Fiscal Shocks

The paper studies the effects of an expansionary fiscal policy in a general equilibrium model of a small open economy. Households are assumed to possess habit-forming, endogenous rates of time preference. In response to fiscal shocks, the model generates cyclical endogenous persistence and procyclical time paths for consumption, employment, and investment, as well as a countercyclical path for the current account. Furthermore, fiscal shocks are shown to have positive long-run effects on output and negative long-run effects on consumption.

Interest Rate–Economic Growth Nexus Under Currency Board Operations

2021 ◽  
Vol 8 (1) ◽  
pp. 13-24
Author(s):  
Martinianus Tshimologo Tibinyane ◽  
Teresia Kaulihowa
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Impulse Response ◽  
Response Function ◽  
Open Economy ◽  
Small Open Economy ◽  
Impulse Response Function ◽  
Policy Instrument ◽  
Variance Decomposition ◽  
Currency Board

This paper analyses the effect of the prime interest rate as a monetary policy instrument to stimulate economic growth in Namibia, a small open economy that is constrained by currency board operations. A Vector Autoregressive Model (VAR) was used for the period 1980–2019. The result shows that Namibia’s prime interest rate has no significant effect on economic growth. This finding remains robust and consistent when impulse response function and variance decomposition are employed. The impulse response function indicates a shock on the prime interest rate exhibits an inverse relationship. However, this effect is insignificant in both short and long-run scenarios. The variance decomposition indicates that the prime interest rate has a strongly exogenous impact, implying it has a weak influence on GDP growth. Policy implication indicates that small open economies under currency board operations need to identify different policy responses to circumvent external shocks and addresses their development needs.

scholarly journals Evaluating an estimated new Keynesian small open economy model

2008 ◽  
Vol 32 (8) ◽  
pp. 2690-2721 ◽  
Author(s):  
Malin Adolfson ◽  
Stefan Laséen ◽  
Jesper Lindé ◽  
Mattias Villani
Keyword(s):  
Open Economy ◽  
Small Open Economy ◽  
New Keynesian ◽  
Economy Model

scholarly journals Does Meaningful Relationship Exist Between Trade Liberalization and Economic Growth? A Case Study of a Small Open Economy

2021 ◽  
pp. 63-79
Author(s):  
Adedapo Odebode ◽  
Olajide Sunday Oladipo
Keyword(s):  
Economic Growth ◽  
Trade Liberalization ◽  
Open Economy ◽  
Trade Openness ◽  
Small Open Economy ◽  
Jel Classification ◽  
Appropriate Technology ◽  
Vector Error Correction ◽  
Meaningful Relationship ◽  
Alternative Measures

Using quarterly data between 1981q1 and 2018q4, the paper investigates the relationship between trade liberalization and economic growth in Nigeria. Exploring Johnasen cointegration technique and the Vector Error Correction (VEC) method, the paper considers three alternative measures of trade liberalization to determine whether the response of economic growth to trade liberalization is sensitive to the choice of the indicators of trade liberalization under consideration. The paper finds significant effects of trade liberalization on the economy. The paper recommends that government should implement policies that will promote trade openness in Nigeria. This may be achieved by establishing bilateral and multi-lateral agreements that are favourable and that will support appropriate technology transfer to domestic producers. JEL classification numbers: F31, F13, F41. Keywords: Trade liberalization, Tariffs, Economic growth, Nigeria.

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