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.

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 The Effect of Higher Education on Growth: A Cointegration Analysis

2013 ◽  
Author(s):  
Murat Mustafa Kutlutürk ◽  
Hakan Kasım Akmaz ◽  
Ahmet Çetin
Keyword(s):  
Higher Education ◽  
Granger Causality ◽  
Cointegration Analysis ◽  
Annual Data ◽  
Causality Test ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
The Relationship

In this study the relationship between higher education and economic growth was investigated using annual data between 1988 and 2012 for Turkey. To see short and long run effects of higher education on growth the Autoregressive Distributed Lag (ARDL) testing approach was used. In this investigation ratio of higher education graduates in employment was used as an explanatory variable. Zivot and Andrews test was implemented for the variables. The long and short run effects of higher education on growth was found significant. Granger causality test was implemented and one way Granger causality from higher education to growth was determined.

scholarly journals The Relationship between Household Debt and Consumption Spending in South Africa

2017 ◽  
Vol 9 (2) ◽  
pp. 243
Author(s):  
Patience Nkala ◽  
Asrat Tsegaye
Keyword(s):  
South Africa ◽  
Well Being ◽  
Household Debt ◽  
Causality Test ◽  
Policy Makers ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Short Run ◽  
The Relationship

Consumption has been and remains the main contributor to gross domestic product (GDP) growth in South Africa. Household debt on the other side has remained high over the years. These two economic indicators are a reflection of the well-being of an economy. This study thus examined the relationship between household debt and consumption spending, for the period between 1994 and 2013. The Johansen cointegration technique and the Vector error correction model (VECM) were utilised to test the long run and short run relationships between the variables. The Granger causality test was also employed to test the direction of causality between the variables. Results from this study have revealed that a relationship exists between household debt and consumption spending in South Africa and they have also showed that this relationship flows from household debt to consumption spending. The implications of these results are that consumption spending may be increased through other measures rather than through increasing debt. The study therefore recommends that policy makers avail more investment opportunities for households and to also create employment in a bid to increase the income of households which can then be used to increase household consumption rather than the use of debt.

THE CAUSAL RELATIONSHIP BETWEEN INSURANCE AND ECONOMIC GROWTH IN NIGERIA (1986-2010)

2012 ◽  
Vol 02 (12) ◽  
pp. 49-57
Author(s):  
TAIWO AKINLO
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Causal Relationship ◽  
Causality Test ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Short Run

This study examined the causal relationship between insurance and economic growth in Nigeria over the period 1986-2010. The Vector Error Correction model (VECM) was adopted. The cointegration test shows that GDP, premium, inflation and interest rate are cointegrated when GDP is the edogeneous variable. The granger causality test reveals that there is no causality between economic growth and premium in short run while premum, inflation and interest rate Granger cause GDP in the long run which means there is unidirectional causality running from premium, inflation and interest rate to GDP. This means insurance contributes to economic growth in Nigeria as they provide the necessary long-term fund for investment and absolving risks.

The Economic and Environmental Impact of Large Financial Developments in an Oil-Dependent Economy

2020 ◽  
pp. 221-240
Author(s):  
Hanan Naser
Keyword(s):  
Economic Growth ◽  
Environmental Impact ◽  
Vector Error Correction Model ◽  
Policy Makers ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Market Shares ◽  
Short Run ◽  
The Relationship

This study examines the economic and environmental impact of large financial developments in Bahrain from year 2006 to 2016. To do so, the relationship between energy consumption, oil prices, market shares, dividend yields, and economic growth has been investigated using Vector Error Correction Model (VECM). The key findings are summarized as follow: (1) Long run relationship exists between the suggested variables. (2) Both energy and financial markets are significant in the long run relationship, and positively affect the economic growth of Bahrain. (3) According to the estimated ECM term, the model is stable in the short run. (4) Decline in oil price has negative significant drawback on the economic growth of Bahrain. Accordingly, it is recommended that policy makers in Bahrain focuses on implement strong strategies that aim at encouraging investments in non-oil sectors without impeding energy sector or economic growth in order to move towards sustainability.

scholarly journals Money Supply, Inflation and Economic Growth: Co-Integration and Causality Analysis

2020 ◽  
Vol 65 (2) ◽  
pp. 29-45
Author(s):  
Ayad Hicham
Keyword(s):  
Economic Growth ◽  
Money Supply ◽  
Structural Breaks ◽  
Inflation Rate ◽  
Causality Analysis ◽  
Causality Test ◽  
Long Run ◽  
Short Run ◽  
The Relationship ◽  
Natural Series

AbstractThe aim of this paper is to examine the relationship between money supply, inflation rate, and economic growth in the context of Algeria, using various econometric procedures as co-integration without and with structural breaks in addition to three different ways of causality test for the period 1970-2018, the results confirm the long-run relationship between the variables with more than three structural breaks, but with the absence of the effects of money supply and inflation rate on economic growth both in short run and long run terms, on the other hand, the causality results confirmed the existence of hidden causalities among the variables running from the cumulative components not from the natural series, and all the results support the Monetarist view of inflation though the absence of any effect of money supply on economic growth.

scholarly journals Long-run equilibrium between personal income tax and economic growth in Bulgaria

2021 ◽  
Vol 7 (1) ◽  
pp. 55-67
Author(s):  
S. Tanchev ◽  
Keyword(s):  
Economic Growth ◽  
Income Tax ◽  
Personal Income ◽  
Tax Revenue ◽  
Personal Income Tax ◽  
Vector Error Correction ◽  
Long Run ◽  
Short Run ◽  
The Relationship ◽  
Long Run Equilibrium

The study analyzes the relationship of personal income tax and economic growth in the long and short runs to show which type of income tax (progressive or proportional) is more compatible with Bulgaria’s economic growth. The methods of Vector Error Correction and Correlation are applied to determine the long-run and short-run impacts of the two types of income tax. The research covers the period from the first quarter of 1999 to the first quarter of 2020. Eurostat data (85 observations) were used. The empirical research has been divided into two periods. The long-run and short-run relationships between economic growth and tax revenue from progressive income tax in Bulgaria have first been studied, followed by the relationship between economic growth and the tax revenue from proportional income tax. The research results show that there is a long-run equilibrium relationship, but not a short-run relationship, between personal income tax and economic growth. The results imply that the progressive income tax is more compatible with economic growth than proportional income tax in Bulgaria in the long run. In the short run, the progressive income tax and proportional income tax have not shown statistically significant relationships with economic growth. Therefore, a progressive income tax leads to greater economic growth than a proportional income tax. From a long-run equilibrium standpoint, it is advisable that Bulgaria switch from proportional to progressive income taxation. It may be inferred that progressive taxation is more appropriate for economic growth than proportional taxation. The results are in conformity with the theory of endogenic growth and reject the neoclassical theory.

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.

scholarly journals The Relationship between Coal Consumption and Economic Growth in Indonesia

2018 ◽  
Vol 2 (1) ◽  
pp. 12
Author(s):  
Irwandi Irwandi
Keyword(s):  
Economic Growth ◽  
Control Variable ◽  
Coal Consumption ◽  
Causality Test ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Export Tax ◽  
The Relationship

Indonesia is one of the largest coal producer countries in the world. In the previous research, it is stated that coal producer countries are able to affect economic growth. The purpose of the study is to investigate the co-integration and causal relationships between coal consumption and income in Indonesia for the period of 1965-2016 using Granger causality test based on Vector Error Correction Model (VECM) employing population as the control variable in bivariate system. The Augmented Dicky-Fuller (ADF) and Phillips-Perron (PP) tests were used to determine the variable stationarity. From Johansen’s co-integration tests, it is indicated that there is a long-run relationship between the variables. The empirical study shows that there is no causal relationship between coal consumption and economic growth in Indonesia since coal consumption in fact cannot affect economic growth in Indonesia. Export tax becomes government revenues earned from energy sectors including coal.

The Economic Growth–Income Inequality–Poverty Nexus and Its Impact on Environmental Degradation: Empirical Evidence from India

2021 ◽  
pp. 097639962110238
Author(s):  
Geetilaxmi Mohapatra ◽  
Arun Kumar Giri
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Environmental Degradation ◽  
Poverty Reduction ◽  
Positive Impact ◽  
Universal Access ◽  
Causality Test ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

This study attempts to examine the main forces affecting short-run and long-run carbon emission patterns due to changes in economic growth, income inequality and poverty in India over the period 1982–2018. For this purpose, it uses the autoregressive distributed lag (ARDL) cointegration technique and the vector error correction model (VECM) based on Granger causality tests. The stationary properties of the variables are checked using the Ng–Perron test. The results of the ARDL bounds test confirm the long-run relationship among the variables. Further, the ARDL coefficient confirms that economic growth and poverty increase carbon emissions in both the short and long run. The empirical findings of the causality test indicate the presence of short-run causality running from economic growth and poverty reduction to environmental degradation. Hence, the study recommends that policymakers must devote more attention to alleviating poverty and reducing income inequalities through redistributing transfers, investing on universal access to health and education, implementing progressive taxation policies, empowering women and enforcing the Clean India mission, which will have a positive impact on reducing environmental degradation in India. Further, the study also recommends appropriate environmental regulations that can substantially stimulate innovations to increase energy efficiency and thereby reduce carbon dioxide (CO2) emissions.

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