scholarly journals Foreign Trade and Economic Growth: Evidence of Thirlwall’s Law in Iran

2011 ◽  
Vol 2 (2) ◽  
pp. 81-88
Author(s):  
Ahmad Jafari Samimi ◽  
Ramezan Hosseinzadeh .
Keyword(s):  
Economic Growth ◽  
Foreign Trade ◽  
Growth Rates ◽  
Income Elasticity ◽  
Relative Price ◽  
Bounds Testing ◽  
Distributed Lag ◽  
Long Run ◽  
Oil Export ◽  
Actual Growth

Thirlwall’s law establishes a relation between the long-run growth rate, the growth of exports and the long-run income elasticity of imports. This paper applies Thirlwall’s basic balance-of-payments constraint growth model to Iranian economic growth for the period of 1971-2007 by using Autoregressive Distributed Lag (ARDL) Bounds Testing approach. The empirical results reveal that import is cointegrated with relative price and income, and the equilibrium growth rates coincide with actual growth rates. However, our estimated findings reveal that the Thirlwall’s law has been rejected in Iran. In other words, balance of payment doesn’t hinder economic growth in this country. The reason may be due to the fact that Iran is a member of OPEC and its oil export plays a significance role in the country’s foreign trade.

scholarly journals Bounds Testing Approach to Cointegration: A Re-examination of FDI and Growth in Vietnam

2013 ◽  
Vol 218 ◽  
pp. 94-113
Author(s):  
ANH PHẠM THẾ ◽  
ĐÀO NGUYỄN THỊ HỒNG
Keyword(s):  
Economic Growth ◽  
Small Sample Size ◽  
Small Sample ◽  
Adjustment Process ◽  
Bounds Testing ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run ◽  
Short Run ◽  
Lag Model

This study examines the econometric and empirical evidence of both causal and long-run relationship between foreign direct investment (FDI) and economic growth in Vietnam, covering a time span of 21 years from 1991 to 2012. The recent and robust methodology of bounds testing or autoregressive distributed lag model (ARDL) approach to Cointegration is employed for the empirical analysis. This technique can capture both short-run and long-run dynamics of variables, particularly in small sample size cases. The findings indicate the existence of a Cointegration relationship between the two time series and a modest adjustment process from short-run to long-run equilibrium. Further results from Granger causality tests conducted within the error correction model confirm a bi-directional causality between economic growth and FDI over the study period.

scholarly journals Do financial systems spur economic growth in the USA? An empirical investigation

2019 ◽  
Vol 66 (2) ◽  
pp. 165-185
Author(s):  
Sheilla Nyasha ◽  
N.M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Positive Impact ◽  
The United States ◽  
Bounds Testing ◽  
Financial Systems ◽  
Development Indicators ◽  
Distributed Lag ◽  
Long Run ◽  
The Usa

In this paper, we use the autoregressive distributed lag (ARDL) bounds testing approach to examine the dynamic impact of both bank-based financial development and market-based financial development on economic growth in the United States of America (USA) during the period 1980 to 2012. In order to adequately capture the depth and width of the USA?s financial system, we used both bank-based and marketbased financial development indices as proxies for bank-based and market-based financial systems. These indices were constructed from a number of bank- and market-based financial development indicators, using the method of means-removed average. Our empirical results reveal that both bank-based and market-based financial development have a positive impact on economic growth in the USA. These results apply irrespective of whether the regression analysis is conducted in the long run or in the short run. We, therefore, recommend that both pro-bank-based and pro-market-based financial sector development policies should be pursued in the USA - in order to bolster real sector growth and economic development.

Electricity Consumption–Economic Growth Nexus: Evidence from ARDL Bound Testing Approach in the Tunisian Context

2020 ◽  
pp. 097215092092543 ◽  
Author(s):  
Zouheir Mighri ◽  
Hanen Ragoubi
Keyword(s):  
Economic Growth ◽  
Electricity Consumption ◽  
Bounds Testing ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Causality Tests ◽  
Short Run ◽  
Testing Approach ◽  
Causal Nexus

This article investigates the causal nexus between electricity consumption and economic growth in Tunisia for the period 1971–2013 by using autoregressive distributed lag (ARDL) bounds testing approach of cointegration and Granger causality tests. The empirical findings indicate the existence of a long-term relationship between electricity consumption and economic growth. Besides, they support the conservation hypothesis in the long run, while they confirm the growth hypothesis in the short run.

Transport Infrastructure and Economic Growth: New Evidence from Tunisia an ARDL Bounds Testing Approach

2017 ◽  
Vol 9 (2) ◽  
pp. 98-112
Author(s):  
Radhia Amairia ◽  
Bouzid Amaira
Keyword(s):  
Economic Growth ◽  
Jel Classification ◽  
Transport Infrastructure ◽  
Annual Data ◽  
Positive Contribution ◽  
Bounds Testing ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run ◽  
Lag Model

The achievement of an effective infrastructure, reliable and fair, is essential for economic growth. Indeed, the transport infrastructure is essential to the prosperity of regions. To investigate the relationship between transport infrastructure and economic growth, we use the autoregressive distributed lag model (ARDL), we find that transport infrastructure is cointegrated with economic performance, indicating the affirmed presence of long-run equilibrium relationships among them. We use annual data for the period from 1980 to 2013. The study found that the transport infrastructure and investment in transport infrastructure in Tunisia have a significant positive contribution to growth, which shows that each impact is strong and statistically significant. The Tunisian experience suggests that it is necessary to design an economic policy that will improve the transport infrastructure and to increase investment made to the sector for sustainable economic growth in Tunisia. It is necessary to improve the existing road and rail networks. JEL Classification: F63, L91, R41

scholarly journals Renewable Energy Consumption and Economic Growth in Nine OECD Countries: Bounds Test Approach and Causality Analysis

2014 ◽  
Vol 2014 ◽  
pp. 1-6 ◽  
Author(s):  
Lin Hung-Pin
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Oecd Countries ◽  
Causality Analysis ◽  
Bounds Testing ◽  
Renewable Energy Consumption ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Vector Error Correction Models

The purpose of this paper is to investigate the short-run and long-run causality between renewable energy (RE) consumption and economic growth (EG) in nine OECD countries from the period between 1982 and 2011. To examine the linkage, this paper uses the autoregressive distributed lag (ARDL) bounds testing approach of cointegration test and vector error-correction models to test the causal relationship between variables. The co-integration and causal relationships are found in five countries—United States of America (USA), Japan, Germany, Italy, and United Kingdom (UK). The overall results indicate that (1) a short-run unidirectional causality runs from EG to RE in Italy and UK; (2) long-run unidirectional causalities run from RE to EG for Germany, Italy, and UK; (3) a long-run unidirectional causality runs from EG to RE in USA, and Japan; (4) both long-run and strong unidirectional causalities run from RE to EG for Germany and UK; and (5) Finally, both long-run and strong unidirectional causalities run from EG to RE in only USA. Further evidence reveals that policies for renewable energy conservation may have no impact on economic growth in France, Denmark, Portugal, and Spain.

scholarly journals Trade Openness and Economic Growth in Nepal

2020 ◽  
Vol 3 (1) ◽  
pp. 1-20
Author(s):  
Surya Bahadur Rana
Keyword(s):  
Economic Growth ◽  
Foreign Trade ◽  
Human Resource Development ◽  
Trade Openness ◽  
Developed Countries ◽  
Bounds Testing ◽  
Advanced Country ◽  
Long Run ◽  
Study Results ◽  
The Impact

This study examines the impact of trade openness on economic growth in Nepal over the period 1975-2019. Using ARDL bounds testing approach to co integration in the multivariate framework, the study results reveal that there exists a long-run relationship between Nepal’s foreign trade and economic growth over the study period. The long-run estimates of ARDL models how that the level of trade openness in Nepal predicts the rate of economic growth of the country positively and significantly in the long-run. The study also reports the positive and significant long run effect of investment level on growth in Nepal over the study period supporting the trade induced investment growth hypothesis. It postulates that trade openness affects economic growth through the channel of investment. The growth enhancing role of trade openness implies that Nepal Government should promote international trade by eliminating trade barriers and making the procedures of foreign trade simple and convenient. Besides, Nepal’s import policy should promote investment environment particularly in capital intensive sectors to take the advantage of technology transfer from technologically advanced country. Furthermore, Nepal should pay proper attention and come up with effective human resource development policy that can uplift human knowledge and skills to make use of technologies from developed countries.

scholarly journals Government Spending and Economic Growth in Ghana: Evidence from Granger Causality Analysis

2017 ◽  
Vol 3 (2) ◽  
pp. 50-58 ◽  
Author(s):  
Lucy Anning ◽  
Wang Haisu ◽  
Joshua Sunday Riti
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Government Spending ◽  
Causality Analysis ◽  
Economic Activities ◽  
Bounds Testing ◽  
Causality Test ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

In spite of the diverse major issues affecting the economy of Ghana over the years, the economy continues to experience a downward spiral in its economic growth. Taking into account three opining views regarding government spending and economic growth, this study sets to investigate the causal nexus fractious and economic growth in Ghana. We apply the autoregressive distributed lag (ARDL) bounds testing approach to co-integration and the vector error correction model (VECM)-Granger causality test to evaluate both long- and short-run parameters including the direction of causation with data spanning from 1980 and 2015.The empirical results show evidence of co-integration for the existence of a long-run relationship between the dependent and independent variables. The Granger causality tests, in addition, indicated causal independence between government spending and economic growth within the time framework of the study in the economy of Ghana. Government spending has a cause effect on economic growth in Ghana. However, government spending channeled into a more fractious use with the building of resilience and infrastructural development that are self-liquidating if encouraged will enhance economic activities in the short run and also propel growth in the long run in the Ghana.

scholarly journals Empirical Study on Tourism and Economic Growth of Bahrain: An ARDL Bounds Testing Approach

2015 ◽  
Vol 7 (11) ◽  
pp. 1 ◽  
Author(s):  
Fuad M. Kreishan
Keyword(s):  
Economic Growth ◽  
Positive Impact ◽  
Tourism Industry ◽  
Bounds Testing ◽  
Time Series Econometrics ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Tourism Activity ◽  
Growth Hypothesis

<p>This paper empirically investigates the tourism-led-growth hypothesis (TLGH) in case of Bahrain. Using time series econometrics techniques the study examines the long run relationship between international tourism and economic growth in Bahrain by using Autoregressive Distributed Lag (ARDL) model over the period of 1990 to 2014. The results obtained from the analyses show that there is a positive relationship between tourism development and economic growth in Bahrain. Moreover, the results indicate that there is unidirectional Granger causality flow from tourism to economic growth in Bahrain. Hence, the development of tourism activity will thus have a positive impact on Bahrain economy. Our findings imply that Bahrain may enhance its economic growth by strategically strengthening the tourism industry in the country. <br /><strong></strong></p>

Impact of Capital Inflows on Manufacturing Exports and Economic Growth: An Empirical Evidence from Nigeria

2020 ◽  
Vol 12 (1) ◽  
pp. 1
Author(s):  
Abiodun Sunday Olayiwola ◽  
Kehinde Elizabeth Joseph
Keyword(s):  
Economic Growth ◽  
Positive Impact ◽  
Manufacturing Sector ◽  
Capital Inflows ◽  
Annual Data ◽  
Economic Policies ◽  
Distributed Lag ◽  
Long Run ◽  
Oil Export ◽  
The Government

A lot of studies have examined the relationship between capital inflows and economic growth in Nigeria; Most of these studies examined either oil export, non-oil export or total exports, without specific emphasis on manufacturing export; given that manufacturing export is fundamental to economic growth. In this case, we examined the dynamic impact of capital inflows on manufacturing exports and economic growth in Nigeria between 1981 and 2017 using annual data. Data collected were analyzed using Autoregressive Distributed Lag (ARDL) econometric techniques and the results revealed that capital inflows have significant and positive impact on economic growth (t= 4.42884, p< 0.005) both in the short and long run; and positive but statistically insignificant impact on manufacturing exports (t= 0.73, p> 0.05). Therefore, the study concluded that capital inflows have significant impact on economic growth but no impact on the manufacturing exports in Nigeria; and we recommend that the government and monetary authorities’ in Nigeria should formulate economic policies that will promote manufacturing exports through adequate and efficient infrastructural facilities that would encourage the needed capital inflows to the manufacturing sector and increase the production of goods for local consumption and export.

scholarly journals Causality Between Public Debt, Public Debt Service and Economic Growth in an Emerging Economy

2020 ◽  
Vol 65 (1) ◽  
pp. 1-19
Author(s):  
Talknice Saungweme ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Public Debt ◽  
Debt Service ◽  
Bounds Testing ◽  
Causality Test ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run

AbstractThis paper explores the causality between public debt, public debt service and economic growth in South Africa covering the period 1970 – 2017. The study employs the autoregressive distributed lag (ARDL) bounds testing approach to cointegration and the multivariate Granger-causality test. The empirical results indicate that there is unidirectional causality from economic growth to public debt, but only in the short run. However, the study fails to establish any causality between public debt service and economic growth, both in the short run and long run. In line with the empirical evidence, the study concludes that it is economic growth that drives public debt in South Africa, and that the causal relationship between public debt and economic growth is sensitive to the timeframe considered. The paper recommends policymakers in South Africa to consider growth-enhancing policies in the short run, since poor economic performances may lead to high public debt levels.

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