scholarly journals RELATIONSHIP BETWEEN BUDGET DEFICIT AND ECONOMIC GROWTH IN VIETNAM

2015 ◽  
Vol 18 (2) ◽  
pp. 79-90
Author(s):  
Nguyen The Huynh ◽  
Thanh-Na Ha Nguyen-Le ◽  
Nghi Quoc Le
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Budget Deficit ◽  
Var Model ◽  
The Government ◽  
Stable Growth ◽  
And Control ◽  
The Relationship

This paper examines the relationship between budget deficit and economic growth in Vietnam, using VAR model. The results indicate that the relationship between budget deficit and economic growth is not clear. However, gross investment has a causal relationship with budget deficit and economic growth. The government should, therefore, implement and control the investment flows as well as effectively manage budget deficit in order to achieve a stable growth in the coming years.

scholarly journals Ṣukūk: A Sharīʿah Compliant Tool for Financing Budget Deficits

2019 ◽  
Vol 32 (1) ◽  
pp. 119-124
Author(s):  
Omar Zuhair Hafiz Omar Zuhair Hafiz
Keyword(s):  
Economic Growth ◽  
Economic Activity ◽  
Budget Deficit ◽  
Negative Relationship ◽  
Budget Deficits ◽  
International Debt ◽  
Key Variables ◽  
The Government ◽  
The Impact ◽  
The Relationship

The lead paper (Pettifor, 2019) discusses an important issue at the macroeconomic level, especially the impact of financing government’s expansionary budget deficit through borrowing. The paper reiterates that claiming that the use of loans to finance the deficit will lead to a decline in the economic activity and will in turn increase the deficit, is a common misconception. In fact, the data on the British economy over a period of a hundred years, as shown in the lead paper, proves that there is a positive relationship between the volume of the budget deficit (and public debt) and economic activity. This, in turn, lead to a decrease in unemployment and thus, eventually contributed to a reduction in the budget deficit. These results have been proven by other researches as well as I have mentioned in this paper. I have also pointed to other researches which indicate that there is a negative relationship between the size of the debt (or the budget deficit), and economic activity, which contradicts the hypothesis of the lead paper. In this brief comment on the lead paper, I also discuss the fact that the global debt phenomenon has become a burning issue. I present a summary of the state of international debt around the world and discuss its impact on the economies of many countries that repay their debts in hard currencies. I argue that this situation must be taken into consideration when discussing the impact of borrowing to finance the government budget deficit to stimulate economic growth. I also propose that these effects on the borrowing economies should also be analyzed in the event that these international loans are in the form of Islamic instruments (ṣukūk) which are increasingly being used by some governments as a tool to finance their budget deficits, especially among the OIC countries. However, because it is a modern financing tool, several years need to pass before we can viably test the relationship between them and economic growth and the extent of their impact on key variables at the macro level of the economy.

Nexus Between Political Stability and Economic Growth– Evidence from Middle East Countries

2021 ◽  
Author(s):  
Mufeed Almula-dhanoon ◽  
Keyword(s):  
Economic Growth ◽  
Middle East ◽  
Causal Relationship ◽  
Causal Relation ◽  
Stability Index ◽  
Political Stability ◽  
Empirical Results ◽  
Middle East Countries ◽  
The Government ◽  
The Relationship

There is much research that has discussed the relationship between political stability and economic growth, but only a few have attempted to explore the causal relationship between them. This paper aims to examine the causative relations between political instability (measured by the government stability index), and economic growth for fourteen countries in the Middle East for the period 1984-2017. The methodology based on the application of Granger Toda-Yamamoto (T-Y) method for the purpose of analyzing the causal relationship between the two variables. The empirical results show that there is no evident on causal relation between political stability and economic growth.

scholarly journals Relationship between Inflation and other Macro Economic Variables in Pakistan

2015 ◽  
Vol 2 (4) ◽  
pp. 6-15
Author(s):  
Adnan Ali ◽  
Farzand Ali Jan ◽  
Sami Ullah Khan
Keyword(s):  
Budget Deficit ◽  
Economic Resources ◽  
Var Model ◽  
Annual Data ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
The Government ◽  
The Relationship

Conventionally, it is claimed that persistently higher deficit in government budget may cause the inflation to rise in the long run but this relationship is not conclusive empirically. Therefore, the present study is aimed to determine the relationship between inflation and other studied variables of macroeconomic i.e. fiscal deficit and supply of money in the short run as well as in the long run in Pakistan. the bound testing approach to co-integration and VAR model, established within an autoregressive distributed lag (ARDL) is used to annual data of time series covering the period of time from 1960 to 2010 for examining the studied variables both in short run as well as in long run. The conclusion of the study shows that the relationship between the studied variables is insignificant in the long-run but the outcomes of VAR model illustrate that a short run positive relationship between the studied variables cannot be ignored. The study further indicates that 1% change in budget deficit and money supply caused to change the inflation by 0.29 and 0.31 times respectively in the short run. The results provide strong evidence that the government may target reducing the inflation by generating domestic economic resources to boost the economic growth instead of reducing budget deficit.

scholarly journals Tourism Industry and Economic Growth Nexus in Beijing, China

Economies ◽  
2019 ◽  
Vol 7 (1) ◽  
pp. 25 ◽  
Author(s):  
Yang Songling ◽  
Muhammad Ishtiaq ◽  
Bui Thi Thanh
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Strong Support ◽  
Growth Index ◽  
Strong Relationship ◽  
Tourism Industry ◽  
Var Model ◽  
Long Run ◽  
The Relationship ◽  
Beijing China

In the developing economy, tourism is the most visible and steadiest growing facade. Tourism is considered one of the rapidly increasing elements for economic development from the last two decades. Therefore, the proposed study used vector autoregression (VAR) model, error correction model (ECM), and the Granger causality to check the relationship between the tourism industry and economic growth based on the data of the Beijing municipal bureau of statistics from 1994 to 2015. Gross domestic product (GDP) is used as a replacement variable for the economic growth index, while internal tourism revenue is used as a tourism industry indicator. The study supports the tourism-led growth hypothesis proposed in the existing literature in a different survey of tourism and economic development. The results show that there is a strong relationship in the tourism industry and economic growth in the context of Beijing, and at the same time, tourism creates a more significant increase in long run local real economic accomplishments. The results of the VAR model confirm that in the long run, Beijing’s economic growth is affected by domestic tourism, while the ECM model shows unidirectional results in the short term. Similarly, there is a one-way causal relationship between the tourism industry and economic growth in Beijing, China. The empirical results are in strong support of the concept that tourism causes growth.

The relationship between energy consumption and economic growth: New evidence from Greece

2021 ◽  
pp. 131-153
Author(s):  
Antonia Gkergki
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Gdp Per Capita ◽  
Short Term ◽  
Vector Error Correction ◽  
Per Capita ◽  
Econometric Tests ◽  
The Government ◽  
New Research ◽  
The Relationship

This paper examines the relationship between the energy consumption and economic growth from 1968 to 2019 in Greece, by employing the vector error-correction model estimation. A series of econometric tests are employed concerning the stationary of the data, and the co-integration and the relationship among the variables during the long- and short-term. The em-pirical results suggest that there is no bidirectional relationship between economic growth and energy consumption. More specifically, GDP per capita does not affect the energy consump-tion of the three primary sources either in the long-term or the short-term. In other words, the economic crisis and its implications for GDP do not affect energy consumption, and they are not responsible for the considerable decrease in energy sources' consumption. On the other hand, the energy consumption of oil and coal negatively affect the GDP per capita. These re-sults are different from previous studies' conclusions for Greece; this is because the never been experienced before. These findings raise new research questions and also show the limi-tations of the Greek market, as it is regulated and controlled by the government.

Fiscal Deficit and Economic Growth in Bangladesh

2016 ◽  
Vol 62 (1) ◽  
pp. 31-42 ◽  
Author(s):  
Ebney Ayaj Rana ◽  
Abu N. M. Wahid
Keyword(s):  
Economic Growth ◽  
Budget Deficit ◽  
Negative Impact ◽  
Political Stability ◽  
Ordinary Least Squares ◽  
Policy Implications ◽  
Government Budget ◽  
The Government ◽  
The Impact ◽  
Government Budget Deficit

The economy of Bangladesh is currently going through a period of continuous budget deficit. The present data suggest that the government budget deficit, on average, is nearly 5% of the country’s GDP. This has been true since the early 2000s. To finance this deficit, governments have been borrowing largely from domestic and foreign sources resulting in inflationary pressure on one hand, and crowding out of private investments on the other. During the same period, although the economy has grown steadily at a rate of more than 6%, this growth is less than the potential. This article presents an econometric study of the impact of government budget deficits on the economic growth of Bangladesh. We conduct a time-series analysis using ordinary least squares estimation, vector error correction model, and granger causality test. The findings suggest that the government budget deficit has statistically significant negative impact on economic growth in Bangladesh. Policy implications of our findings include reestablishing the rule of law, political stability in the country, restructuring tax structure, closing tax loopholes, and harmonizing fiscal policy with monetary policy to attract additional domestic and foreign investment.

scholarly journals A time series analysis of determinants of FDI in Afghanistan: Which one matters the most, security or economic growth?

2018 ◽  
Vol 6 (2) ◽  
pp. 19
Author(s):  
Abdul Fareed Delawari
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Foreign Direct Investment ◽  
Time Series Analysis ◽  
Direct Investment ◽  
Economic Factors ◽  
Market Economic ◽  
The Government ◽  
The Relationship

Afghanistan has been practicing market economic system since 2002. Since then, the government has been initiating different policies and announced various incentives to attract foreign direct investment (FDI) to the country. However, the outcome has not been satisfactory due to several political and economic factors. This paper explores the relationship between security, economic growth and FDI in Afghanistan, using ARDL model. The paper covers a period from 2002 to 2016. The empirical results of this study show that there is a negative long-term relationship between security and FDI. Hence,  the author concludes that, to attract FDI to the country, insuring security should be the top priority of the government of Afghanistan.

scholarly journals Moderating Effect of Political Instability on ICT and Economic Growth Nexus in Kenya: ARDL Bound - Co-Integration Approach

2021 ◽  
Vol 04 (10) ◽  
Author(s):  
Matundura Erickson ◽  
Keyword(s):  
Economic Growth ◽  
Political Instability ◽  
Political Stability ◽  
Moderating Effect ◽  
High Interest ◽  
Long Run ◽  
The Government ◽  
The Impact ◽  
Adf Test ◽  
The Relationship

The government has attempted to target specific macroeconomic factors in order to stimulate economic growth in Kenya through monetary and fiscal policies. Despite these efforts, Kenya's GDP growth is hampered by high interest rates and high interest rate volatility. Kenya's ability to address macroeconomic instability hinges on its ability to increase economic growth. Auxiliary evidence shows that perspectives on the relationship between ICT and economic growth are segmented. The goal of this study was to determine the impact of ICT on economic growth in Kenya, as well as the moderating effect of political instability on the relationship. The research was based on Solow's theory of growth. An explanatory research design was used, with data spanning from 1990-2020 obtained from Kenya Bureau of Statistics. In the empirical analysis, the study used the bound test to test for a long-run relationship and the Autoregressive Distributed Lag model (ARDL) to evaluate the relationship between the variables. The data was subjected to an Augmented Dickey Fuller (ADF) test to determine stationarity.The long run ARDL results indicated that the coefficients of; ICT rate were insignificant . However with the introduction of political instability as the moderator ICT was significant and positively affected economic growth. Political instability moderated the relationship between ICT ( and economic growth. As a result, promoting effective governance should help to improve political stability. The findings of this study will help the government figure out how to address the problem of low economic growth. According to the study, the government should invest in the ICT sector to improve its accessibility and affordability. Additionally, the government should work to improve political stability and good governance by gradually establishing institutions that uphold the rule of law and provide security.

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