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Article
Publication date: 1 February 1991

Augustine C. Arize, John B. Spalding and Bedford N. Umezulike

The empirical estimates for the money demand function reported hereare based on quarterly time series for Thailand for the period 1973:1 to1985:4. The money demand…

Abstract

The empirical estimates for the money demand function reported here are based on quarterly time series for Thailand for the period 1973:1 to 1985:4. The money demand function estimated is novel in that it takes into account the potential effect of external monetary developments on domestic money demand in the open economy of Thailand. The empirical results show that foreign interest rates do play an important role in the Thailand money demand function. Hence the Thailand monetary authorities should not ignore the response of domestic money demand to external factors in formulating their stabilisation policies.

Details

Journal of Economic Studies, vol. 18 no. 2
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 1 December 2001

Augustine C. Arize

Applies new tests for parameter instability in cointegrated models to evaluate the traditional export demand function. The determinants of exports considered are world…

1525

Abstract

Applies new tests for parameter instability in cointegrated models to evaluate the traditional export demand function. The determinants of exports considered are world real income, export price and competitors’ export price. The data for Singapore (a newly industrializing economy), from 1973‐1997, are used as a case study. Results suggest that Singapore does not satisfy the conditions of a small, price‐taking country in world trade. Irrespective of whether one normalizes export demand function by price or quantity, the state of external demand appears to be a key ingredient in Singapore’s export growth. This finding differs markedly from Riedel’s evidence. It is found that the estimation of Singapore’s export demand model requires the inclusion of some dummy variables in order to achieve not only cointegration but also long‐run parameter stability. However, once the structural breaks are accounted for, a stable relation is found, which resists a series of specification tests.

Details

Journal of Economic Studies, vol. 28 no. 6
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 4 May 2020

Mohsen Bahmani-Oskooee and Augustine Chuck Arize

The purpose is to assess the asymmetric effects of exchange rate changes on the trade balance using data from African nations.

Abstract

Purpose

The purpose is to assess the asymmetric effects of exchange rate changes on the trade balance using data from African nations.

Design/methodology/approach

The methodology is based on the most recent development in asymmetry cointegration and error-correction modeling.

Findings

While the authors find short-run asymmetric effects in many of the countries in their sample, asymmetry cointegration yields support for the new definition of the J-curve in Algeria, Cameroon, Ethiopia, Morocco, Tanzania and Zambia.

Originality/value

This is the first study that applies nonlinear ARDL approach of Shin et al. (2014) using data from each of the 13 countries in Africa.

Details

Journal of Economic Studies, vol. 47 no. 5
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 22 July 2019

Augustine Chuck Arize, Ebere Ume Kalu, Chinwe Okoyeuzu and John Malindretos

This study aims to make a comparative study of the applicability of the purchasing power parity (PPP) in selected less developing countries (LDCs) on one hand and European…

Abstract

Purpose

This study aims to make a comparative study of the applicability of the purchasing power parity (PPP) in selected less developing countries (LDCs) on one hand and European countries on the other hand.

Design/methodology/approach

The research design is empirical and ex post facto. This study uses an assortment of co-integration tests and error correction representation. The chosen approach allows for the consideration of long-run elasticities and the dynamics of the short-run adjustment of exchange rates to changes in domestic and foreign prices. Monthly data are used for the period 1980:1 through 2015:12 (i.e. 432 observations).

Findings

Results from long-run co-integration analysis, short-run error correction models and persistence profile analysis overwhelmingly confirm the validity of PPP in these two sets of countries regardless the disparity in their relative exchange rate and price characteristics.

Research limitations/implications

Curiously, several of these empirical studies and still many more, have focused their attention on the experiences of industrialized countries, with a few investigations devoted to LDCs. The evidence is even scarcer in Africa. Clearly, the acceptance of any hypothesis as a credible explanation of economic reality hinges on the robustness of the hypothesis across countries with different economic and institutional frameworks.

Practical implications

Knowledge of the extent to which exchange rate and relative prices can be linked in the long run is important for the design and management of inflation and the implementation of monetary policy. For instance, policy actions aimed at stabilizing the domestic economy can obtain results that are, at best, uncertain in the absence of correct characterization of the PPP dynamics. Moreover, structural and macroeconomic adjustment programs implemented in these countries to achieve economic growth and external competitiveness could be unsuccessful if flawed estimates of PPP exchange rates are retained.

Originality/value

Several empirical studies have been done to prove the validity or otherwise of the PPP. Unlike prior authors, this study makes a comparative study of the applicability of the PPP in selected LDC on one hand and European countries.

Details

Journal of Financial Economic Policy, vol. 12 no. 1
Type: Research Article
ISSN: 1757-6385

Keywords

Article
Publication date: 31 May 2022

Ebere Ume Kalu, Augustine Chuck Arize, Sylvester Okechukwu Ilo, Ifeoma Ihegboro and Chiamaka Goodness Eze

This study investigated the interactive impact of global and domestic stock market variables on the depth of the financial system in Sub-Saharan African (SSA) countries…

Abstract

Purpose

This study investigated the interactive impact of global and domestic stock market variables on the depth of the financial system in Sub-Saharan African (SSA) countries from 1990 to 2018.

Design/methodology/approach

The study used the mean group and pooled mean group estimators for the dynamic heterogeneous panel.

Findings

The results provide strong statistical evidence that the depth of the financial system in SSA countries is influenced by a combination of local and international stock market indicators. While the local variables exert a positive influence, the global indicator tends to negatively affect the depth of the system, particularly the monetization ratio.

Practical implications

While the tendency of portfolio adjustments and reversal can be inferred, the study stresses the need for a more globalized approach to financial policy formulation and implementation even as the trend of global financializaton gets more robust and more profound.

Originality/value

This study is unique in that, unlike prior ones, it has extended the debate on the role of the stock market in financial deepening from a domestic to an international dimension. Financial policy making can be aided by the authors' findings through looking at the financial deepening-stock market linkage from both domestic and globalized perspectives.

Details

Journal of Economic Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0144-3585

Keywords

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