scholarly journals The Dynamics between External Public Debt and Foreign Exchange Reserve of Ethiopia Economy: 1981 to 2019

2021 ◽  
Vol 23 (11) ◽  
pp. 791-824
Author(s):  
Solomon Kebede Menza ◽  
◽  
Zerihun Getachew ◽  
Berhanu Kuma ◽  
Tora Abebe ◽  
...  
Keyword(s):  
Foreign Exchange ◽  
Public Debt ◽  
Service Sector ◽  
Tariff Rate ◽  
Foreign Exchange Reserve ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run ◽  
Short Run ◽  
The Government

This paper empirically examined the short-run and long-run dynamics among external public debt and foreign exchange reserve of Ethiopia. The two variables are playing a pivotal role in the growth and development of nations economy. To achieve the objective the study took 39 years data from the year 1981 to 2019 from National bank of Ethiopia and World Bank data sets. The study used descriptive analysis and empirical methods of analysis. The Autoregressive Distributed Lag model with error correction models were employed after checking the possible assumptions of our economic series. The results of ADF test statistics confirms our economic series are stationary at level and first difference forms. Bounds co-integration test suggests one co-integrating relationship between the variables taking foreign exchange reserve as the outcome variable. According to the descriptive method of analysis, on average, in Ethiopia the trend for service sector indicated that an ever improvement of the sector throughout the periods and supplementing the notion of change from agriculture base to service sector. In addition, the trade tariff rate of Ethiopian economy is indicating a downward movement and this in turn justifies the relative openness of the economy to the globe. In the same manner the financial development indicator of the nation is rising, which assures relative improvement in the financial sector. On the other hand, according to the Autoregressive Distributed Lag model in the short -run average trade tariff rate, share of manufacturing sector from the GDP, and lagged value of EPD itself predicts the external public debt significant at least at less than 10 percent level of significance. Moreover, the error correction model revealed that in the long-run, financial development indicator, debt service payment, and average trade tariff rate were predicting the stock of foreign exchange reserve for Ethiopian economy. The result also indicates that in the short-run, only the share of agriculture and service sectors are significantly predicting the variations of the stock of foreign exchange reserve, ceteris paribus. Finally, the concerned body specially the government of Ethiopia should limit or reduce the amount of external debt inflows that has an adverse effect on debt service payment, and recheck the budget sources for financing different projects especially manufacturing industries rather than highly basing on external sources in the form of external public debt . More importantly, the government should enhance the value of export potential, among others.

scholarly journals The Dynamics of Foreign Public Debt and Foreign Exchange Reserve of Ethiopia: Autoregressive Distributed Lag Model Approach

2021 ◽  
Vol 6 (1) ◽  
pp. 13-27
Author(s):  
Solomon Kebede Menza ◽  
◽  
Zerihun Getachew ◽  
Berhanu Kuma ◽  
Tora Abebe ◽  
...  
Keyword(s):  
Foreign Exchange ◽  
Public Debt ◽  
Service Sector ◽  
Tariff Rate ◽  
Foreign Exchange Reserve ◽  
Ardl Model ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run

External public debt and foreign exchange reserve (FER) are performing a crucial role in the growth and development of countries. To examine the short-run and long-run dynamics among external public debt (EPD) and FER in Ethiopia, the study used 39 years data (1981 to 2019) from National bank of Ethiopia (NBE) and World Bank data sets. The Autoregressive Distributed Lag (ARDL) model with error correction model (ECM) was employed after checking the possible assumptions of economic series. The results of ADF test statistics confirms our economic series are stationary with a mixture of level form and first difference form. Bounds co-integration test suggests the existence of co-integration among the variables. According to the descriptive method of data analysis, on average, in Ethiopia the trend for service sector indicated that an ever improvement of the sector throughout the periods and supplementing the notion of change from agriculture base to service sector. On the other hand, according to ARDL model in the short -run on average trade tariff rate, share of manufacturing sector from the GDP, and lagged value of EPD itself predicts the EPD significantly at least at less than 10% level of significance . Moreover, the ECM revealed that in the long-run, financial development indicator, debt service payment, and average trade tariff rate were predicting the stock of FER for Ethiopian economy. Finally, the concerned body, the government of Ethiopia, should limit or reduce the amount of external debt (ED) inflows, and recheck the budget sources for financing different projects especially manufacturing industries rather than highly basing on external sources in the form of EPD, among others.

scholarly journals Modelling Sustainability Agriculture and Economic Development in Indonesia

2021 ◽  
Vol 316 ◽  
pp. 02049
Author(s):  
Agung Suwandaru ◽  
Thamer Alghamdi
Keyword(s):  
Economic Development ◽  
Sustainable Agriculture ◽  
Technical Assistance ◽  
Agricultural Policies ◽  
Distributed Lag ◽  
Negative Results ◽  
Distributed Lag Model ◽  
Long Run ◽  
Short Run ◽  
The Government

Agriculture sustainability plays an essential role in country development. This paper aims to examine whether sustainable agriculture is beneficial to economic development in Indonesia. The empirical analysis employs the autoregressive distributed lag model over the data from 1961-2016. The results show that sustainable agriculture significantly contributes to economic development in the long run for both models. The gross fixed capital and rural population as endogenous variables show the positive relationship in the long run, but technical assistance shows negative results. In the short run, all variables show mixed results in different lags. These findings conclude that agricultural policies are broadly on the right track. However, the government needs to focus more on the agricultural bureaucracy and strengthen its infrastructure.

scholarly journals Mobile Money Use: The Impact of Macroeconomic Policy and Regulation

Economies ◽  
2021 ◽  
Vol 9 (2) ◽  
pp. 51
Author(s):  
Lorna Katusiime
Keyword(s):  
Exchange Rate ◽  
Interest Rates ◽  
Financial Innovation ◽  
Macroeconomic Policy ◽  
Mobile Money ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run ◽  
Short Run ◽  
The Impact

This paper examines the effects of macroeconomic policy and regulatory environment on mobile money usage. Specifically, we develop an autoregressive distributed lag model to investigate the effect of key macroeconomic variables and mobile money tax on mobile money usage in Uganda. Using monthly data spanning the period March 2009 to September 2020, we find that in the short run, mobile money usage is positively affected by inflation while financial innovation, exchange rate, interest rates and mobile money tax negatively affect mobile money usage in Uganda. In the long run, mobile money usage is positively affected by economic activity, inflation and the COVID-19 pandemic crisis while mobile money customer balances, interest rate, exchange rate, financial innovation and mobile money tax negatively affect mobile money usage.

scholarly journals Determinants of Insurance Penetration in West African Countries: A Panel Auto Regressive Distributed Lag Approach

2021 ◽  
Vol 14 (8) ◽  
pp. 350
Author(s):  
Odunayo Olarewaju ◽  
Thabiso Msomi
Keyword(s):  
Banking Sector ◽  
West African ◽  
Education Sector ◽  
African Countries ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Auto Regressive ◽  
Insurance Penetration ◽  
The Government

This study analyses the long- and short-term dynamics of the determinants of insurance penetration for the period 1999Q1 to 2019Q4 in 15 West African countries. The panel auto regressive distributed lag model was used on the quarterly data gathered. A cointegrating and short-run momentous connection was discovered between insurance penetration along with the independent variables, which were education, productivity, dependency, inflation and income. The error correction term’s significance and negative sign demonstrate that all variables are heading towards long-run equilibrium at a moderate speed of 56.4%. This further affirms that education, productivity, dependency, inflation and income determine insurance penetration in West Africa in the long run. In addition, the short-run causality revealed that all the pairs of regressors could jointly cause insurance penetration. The findings of this study recommend that the economy-wide policies by the government and the regulators of insurance markets in these economies should be informed by these significant factors. The restructuring of the education sector to ensure finance-related modules cut across every faculty in the higher education sector is also recommended. Furthermore, Bancassurance is also recommended to boost the easy penetration of the insurance sector using the relationship with the banking sector as a pathway.

scholarly journals The impact of education tax and investment in human capital on economic growth in Nigeria

2020 ◽  
Vol 3 (2) ◽  
pp. 77-86
Author(s):  
Abubakar Aminu ◽  
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Tertiary Education ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run ◽  
Lag Model ◽  
The Government ◽  
Capital Development ◽  
The Impact

This paper investigated the impact of education tax and investment in human capital on economic growth in Nigeria utilizing the Non-Linear Autoregressive Distributed Lag Model of cointegration covering the period of 25 years from 1995 to 2019. The findings reveal that education tax and investment in human capital have positive and significant effect on the growth of the Nigerian economy over the sampled period. The paper recommends that in order to boost the economy, Nigeria would need to, among other policy frameworks, provide a suitable environment for ensuring macro-economic stability through effective utilization of income from education tax that will encourage increased investment in human capital in the public sector. In addition to income from education tax, for effective and speedy economic growth and development in Nigeria, the government, beneficiaries (students/parents), employers of labor and other stakeholders in the society should share the responsibility for financing primary, secondary and tertiary education, so as to provide a solid foundation for human capital development. However, as revealed in this paper, the contribution of education tax and investment in human capital is most likely to be realized over a long-run period than in the short term. Keywords: Education Tax; Investment; Human capital; Economic growth

scholarly journals The Determinants of Food Prices in Pakistan

2012 ◽  
Vol 17 (1) ◽  
pp. 101-128 ◽  
Author(s):  
Henna Ahsan ◽  
Zainab Iftikhar ◽  
M. Ali Kemal
Keyword(s):  
Active Role ◽  
Food Prices ◽  
Significant Variable ◽  
Demand And Supply ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Lag Model

Controlling prices is one of the biggest tasks that macroeconomic policymakers face. The objective of this study is to analyze the demand- and supply-side factors that affect food prices in Pakistan. We analyze their long-run relationship using an autoregressive distributed lag model for the period 1970–2010. Our results indicate that that the most significant variable affecting food prices in both the long and short run is money supply. We also find that subsidies can help reduce food prices in the long run but that their impact is very small. Increases in world food prices pressurize the domestic market in the absence of imports, which cause domestic food prices to rise. If, however, we import food crops at higher international prices, this can generate imported inflation. The error correction is statistically significant and shows that market forces play an active role in restoring the long-run equilibrium.

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.

LPG consumption and economic growth, 1975-2016: evidence from Cameroon

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jean Gaston Tamba
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Liquefied Petroleum Gas ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Gas Consumption ◽  
The Government ◽  
Energy Efficiency Policies

Purpose This paper aims to examine the causal relationship between liquefied petroleum gas consumption and economic growth in Cameroon over the period from 1975 to 2016. Design/methodology/approach The methodology of this study is based on the unit root, cointegration and causality tests. Cointegration is performed with both Johansen and autoregressive distributed lag bounds approach, while causality is done with the Granger test based on the error correction model (ECM) and Toda-Yamamoto procedure. Findings The cointegration methods confirm the existence of a level relationship, whereas the causal tests of the ECM reveal the existence of a short-run unidirectional causal relationship ranging from liquefied petroleum gas (LPG) consumption to economic growth and a bidirectional causal relationship between long-term and high-causality variables. With the Toda-Yamamoto procedure, unidirectional causality is found to run from economic growth to liquefied petroleum gas consumption. Research limitations/implications These findings imply that an increase in liquefied petroleum gas consumption leads to an increase in economic growth. As a result, supporting energy efficiency policies that aim to reduce liquefied petroleum gas consumption is not an option for Cameroon. Given that LPG consumption shares are still low in Cameroon, the government ought, thus, to increase LPG subsidization, vulgarize and favor policies aimed at encouraging LPG consumption to increase LPG deposits nationwide. This would help increase LPG consumption and consequently could increase economic growth in Cameroon. Originality/value LPG is a fossil fuel and is the less GHG emitter and it is considered as a modern source of energy for cooking in Cameroon households. It scarcity calls on energy policymakers to question the influence LPG consumption could have on economic growth in the short- and long-run. Thus, this paper could contribute to solving the issue of deforestation in Cameroon, especially in the Sahel zone; through the substitution of firewood consumption by LPG consumption in households.

scholarly journals Milk Supply Response in Delaware

1980 ◽  
Vol 9 (1) ◽  
pp. 41-45 ◽  
Author(s):  
G. Joachim Elterich ◽  
Sharif Masud
Keyword(s):  
Milk Production ◽  
Negative Impact ◽  
Milk Supply ◽  
Supply Response ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run ◽  
Milk Cows ◽  
Short Run ◽  
Lag Model

Milk supply response by dairy farmers in Delaware was analyzed employing distributed lag price structures for number of milk cows and milk production per cow. A polynominal distributed lag model is fitted to quarterly data with deflated prices for the period 1966 to 1978. The variations in the number of milk cows is explained by about 98 percent. Farmers react positively to milk prices after 1–2 years, while wages and feed prices have a negative impact on cow numbers. Milk production per cow shows positive adjustments to milk prices after 6 to 15 months. Technology and feed prices influence also milk production While the short-run price elasticity of milk production is only .2, the long-run aggregate elasticity grows to 2.8 percent. Intermediate-run projections of milk supply were also performed with the model.

SHORT-RUN AND LONG-RUN IMPACT OF INFLATION, UNEMPLOYMENT, AND ECONOMIC GROWTH TOWARDS POVERTY IN INDONESIA: ARDL APPROACH

2019 ◽  
Vol 2 (1) ◽  
pp. 15
Author(s):  
Ahmadi Murjani
Keyword(s):  
Economic Growth ◽  
Poverty Alleviation ◽  
Macroeconomic Variables ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Ardl Approach ◽  
Short Run ◽  
The Government ◽  
The Impact

 Poverty alleviation has become a vigorous program in the world in recent decades. In line with the efforts applied by the government in various countries to reduce poverty, some evaluations have been practised. The impacts of macroeconomic variables such as inflation, unemployment, and economic growth have been commonly employed to be assessed for their impact on the poverty. Previous studies in Indonesia yielded mix results regarding the impact of such macroeconomic variables on the poverty. Different methods and time reference issue were the suspected causes. This paper aims to overcome such problem by utilising the Autoregressive Distributed Lag (ARDL) equipped with the latest time of observations. This paper finds in the long-run, inflation, unemployment, and economic growth significantly influence the poverty. In the short-run, only inflation and economic growth are noted affecting poverty significantly. 

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