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Book part
Publication date: 26 November 2019

Dipyaman Pal, Chandrima Chakraborty and Arpita Ghose

The present study aims to determine the existence of simultaneous relationship between economic growth, income inequality, fiscal policy, and total trade of the 13…

Abstract

The present study aims to determine the existence of simultaneous relationship between economic growth, income inequality, fiscal policy, and total trade of the 13 emerging market economies as a group for the period 1980–2010. After establishing the existence of simultaneity between the above relationships, a simultaneous panel model has been formulated and estimated incorporating the nonlinearity among the variables as suggested by the existing literature. An inverted U-shape relationship is evident between (1) economic growth, income inequality, and total trade in economic growth equation, (2) income inequality, economic growth, and per capita income in income inequality equation, and (3) total trade and economic growth in total trade equation. Thus, the existence of a two-way nonlinear relationship is highlighted between economic growth, income inequality, and total trade. Apart from these nonlinear relationships, positive and significant effect of (1) gross capital formation, inflation, population growth, human capital, fiscal policy, monetary policy, and domestic credit to private sector on economic growth; (2) civil liabilities on income inequality; (3) gross capital formation and inflation on total trade; (4) total trade, population growth of those aged 65 years and above, political system on fiscal policy is highlighted. Also, negative and significant effect of (1) fiscal policy on income inequality and (2) income inequality on fiscal policy is revealed.

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The Gains and Pains of Financial Integration and Trade Liberalization
Type: Book
ISBN: 978-1-83867-004-7

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Book part
Publication date: 15 August 2007

Ritab S. Al-Khouri

This paper presents new evidence of the relationship between financial market development (banking sector) and economic growth for a set of seven Middle East and North…

Abstract

This paper presents new evidence of the relationship between financial market development (banking sector) and economic growth for a set of seven Middle East and North African economies over the period 1965–2002. We find evidence that in six of the seven countries, banking-sector development Granger causes increases in economic growth. However, in three of those six countries, economic growth also Granger causes banking development. Our co-integration analysis reveals that there is a stable long-run equilibrium relationship between banking-sector development and economic growth for all our countries. However, based on vector error-correction models, there is limited evidence that banking-sector development boosts economic growth in the short run.

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Issues in Corporate Governance and Finance
Type: Book
ISBN: 978-1-84950-461-4

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Article
Publication date: 22 December 2020

Taiyan Huang

The purpose of this paper is based on China’s economic fundamentals. Factor input, structural optimization and institutional reform, which determine the fundamentals of…

Abstract

Purpose

The purpose of this paper is based on China’s economic fundamentals. Factor input, structural optimization and institutional reform, which determine the fundamentals of China's economic development, will actively prop up long-term, sustained and stable growth of the Chinese economy and keep China's potential economic growth rate stabilized within a reasonable growth range in the long term.

Design/methodology/approach

The fundamentals of economic development of a country are the basic situation of economic operation determined by the country's main factors and the long-term trend thereof, and they have such characteristics as stability, internality and persistence.

Findings

Stability refers to economic operation that remains relatively stable within a reasonable growth range at a certain stage of development, and this does not rule out exceptional economic fluctuations in certain years due to the impact of unexpected short-term factors. For instance, the fundamentals of the Chinese economy during the period after the reform and opening-up are characterized by a sustained high growth rate.

Originality/value

Internality refers to the intrinsic quantity and quality of all factors supporting the economic development of a country, especially the quantity and quality of the factors that play a decisive role in the economic development of a country at a specific stage. For instance, demographic dividend and capital formation have bolstered the high-speed growth of the Chinese economy since the reform and opening-up.

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China Political Economy, vol. 3 no. 2
Type: Research Article
ISSN: 2516-1652

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Article
Publication date: 31 August 2012

William R. DiPeitro and Emmanuel Anoruo

The purpose of this paper is to examine the impact of the size of government and public debt on real economic growth, for a panel of 175 countries around the world.

Abstract

Purpose

The purpose of this paper is to examine the impact of the size of government and public debt on real economic growth, for a panel of 175 countries around the world.

Design/methodology/approach

The paper utilizes the fixed‐effects and random‐effects techniques to estimate the panel regressions.

Findings

The results indicate that both the size of government and the extent of government indebtedness have negative effects on economic growth.

Practical implications

The findings suggest that the authorities ought to take the necessary steps to curtail excessive government spending and public debts, in order to promote economic growth.

Originality/value

The contribution of the paper is its application of the fixed‐ and random‐effects techniques in modeling the relation of real economic growth to the size of government and public debt, for a panel of 175 countries around the world.

Details

Journal of Economic Studies, vol. 39 no. 4
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 28 October 2013

Abdullah Alam

The paper aims to study the relationship between economic growth, nuclear energy consumption and carbon dioxide (CO2) emissions for a panel of 25 countries over a period…

Abstract

Purpose

The paper aims to study the relationship between economic growth, nuclear energy consumption and carbon dioxide (CO2) emissions for a panel of 25 countries over a period of 1993-2010. Through this study, the author has provided an insight into one of the available sources of energy, i.e. nuclear energy and its impact on economic growth and CO2 emissions.

Design/methodology/approach

Separate panels are created for developing and developed economies. Short- and long-run causalities between the variables are established using error correction mechanism.

Findings

For the developed countries, short-run causality running from CO2 emissions to economic growth was estimated, whereas strong form of causality indicated the dependence of CO2 emissions on economic growth and nuclear energy consumption was seen to impact CO2 emissions. For the developing countries, both the short-run and strong-form causality estimates indicate that economic growth causes CO2 emissions.

Practical implications

On policy front, developing countries can safely adopt CO2 cut-back policies as they are not found to impact economic growth. For the developed countries, such policies may impede growth in the short run, but in the long run these policies do not affect the economic growth.

Originality/value

Keeping in mind the significance of nuclear energy consumption in economic growth and less/no GHG emissions generated by nuclear energy, this study validates its significance. This study, to the best of the author's knowledge, considers the largest panel (i.e. 25 countries) to date and the only study that focuses on studying three different panels (complete dataset, developed countries, developing countries) in one study and applies the vector error correction mechanism to study the causal relationship between nuclear energy consumption, CO2 emissions and economic growth.

Details

Journal of Economic Studies, vol. 40 no. 6
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 1 March 2002

Fouad K. AINajjar

This study examines the cross‐sectional relationship between economic growth and variables suggested by the economic literature as affecting economic growth. The results…

Abstract

This study examines the cross‐sectional relationship between economic growth and variables suggested by the economic literature as affecting economic growth. The results show that economic freedom, in addition to known macroeconomic variables, is significantly related to economic growth.

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Review of Accounting and Finance, vol. 1 no. 3
Type: Research Article
ISSN: 1475-7702

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Article
Publication date: 18 May 2010

Stanislav Ivanov and Craig Webster

The aim of this paper is to present a methodology for the decomposition of economic growth by industry which allows interindustry comparisons.

Abstract

Purpose

The aim of this paper is to present a methodology for the decomposition of economic growth by industry which allows interindustry comparisons.

Design/methodology/approach

The paper uses the growth decomposition methodology developed by Ivanov and Ivanov and Webster for tourism and generalizes it for all industries in the national economy.

Findings

The methodology is exemplified with analysis of the contribution of specific industries to economic growth in Bulgaria for the period 2000‐2005. However, the model presents an approach that is general and can be applied to other countries and industries.

Research limitations/implications

The methodology identifies the direct impacts of specific industries on the per capita growth of real gross domestic product/gross value added. Future research might integrate indirect and induced effects in the analysis. The methodology could be further refined by decomposing the gross domestic product/gross value added to their constituent elements.

Practical implications

The paper identifies the industries in the Bulgarian economy that generate economic growth.

Originality/value

The paper introduces a new methodology for measuring the contribution of specific industries to economic growth. It might be of value to both academics and macroeconomic policy makers.

Details

Journal of Economic Studies, vol. 37 no. 2
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 10 June 2021

Oluyemi Theophilus Adeosun and Isaac Idris Gbadamosi

The purpose of this paper is to investigate the impact or contribution of non-oil sectors on economic growth (GDP/capita) of some selected African countries using panel…

Abstract

Purpose

The purpose of this paper is to investigate the impact or contribution of non-oil sectors on economic growth (GDP/capita) of some selected African countries using panel data analysis.

Design/methodology/approach

The paper focused on secondary data for the period 1991–2019 for macro parameters, including agriculture, industry, export and service, and GDP/capita received from World Development Indicators (WDI). Panel unit root tests like Levin, Lin and Chu test and Im, Pesaran and Shin test, Johansen co-integration test, Granger causality test and an error correction model were also applied to the data for analysis.

Findings

The study reveals no causality from agriculture to economic growth, which implies most of the African countries (used in this study) have neglected agriculture as a source of economic growth. The industry independent variable was of no effect on these countries’ economic growth, whereas the findings reveal that industry has causality on economic growth. Economic growth has no causality on the industry, which means the industry is not contributing to economic growth. The study also shows no causality from export and service to economic growth, but a causality runs from economic growth to export and service.

Originality/value

The paper examines the contribution of the non-oil sectors to economic growth in selected African countries.

Details

World Journal of Science, Technology and Sustainable Development, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2042-5945

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Article
Publication date: 8 June 2021

Sam Kris Hilton

Considering the continuous rise in the public debt stock of developing countries (particularly Ghana) with the unstable economic growth rate for the past decades and the…

Abstract

Purpose

Considering the continuous rise in the public debt stock of developing countries (particularly Ghana) with the unstable economic growth rate for the past decades and the recent borrowing because of the impact of COVID 19, this paper aims to examine the causal relationships between public debt and economic growth over time.

Design/methodology/approach

The paper uses a dynamic multivariate autoregressive-distributed lag (ARDL)-based Granger-causality model to test the causal relationships between public debt and economic growth [gross domestic product (GDP)]. Annual time-series data that spanned 1978–2018 were sourced from the World Bank Development Indicator database and the IMF fiscal Affairs Department Database and WEO.

Findings

The results reveal that public debt has no causal relationship with GDP in the short-run but there is unidirectional Granger causality running from public debt to GDP in the long run. Again, investment spending has a negative bi-directional causal relationship with GDP in the short-run but they have a positive bi-directional causal relationship in the long run. Conversely, no short-run causal relationship exists between government consumption expenditure and GDP but long-run Granger causality runs from government consumption expenditure to GDP. Finally, public debt has a positive impact on the inflation rate in the short run.

Practical implications

The findings imply that government(s) must ensure high fiscal discipline to serve as a precursor for the effective and efficient use of recent borrowing, that is, the loans should be used for highly prioritized projects (preferably investment spending) that are well evaluated and self-sustained to add positively to the GDP.

Originality/value

This paper provides contemporary findings to augment extant literature on public debt and economic growth by using variables and empirical models, which prior studies could not sufficiently cover in a developing country perspective and affirms that public debt contributes to GDP only in the long run.

Details

Asian Journal of Economics and Banking, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2615-9821

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Content available
Article
Publication date: 2 June 2021

Junchao Li and Shan Huang

Under the background of the overall increase of China's economic policy uncertainty and the urgent need for the transformation and upgrading of the substantial economy…

Abstract

Purpose

Under the background of the overall increase of China's economic policy uncertainty and the urgent need for the transformation and upgrading of the substantial economy, this paper studies the time-varying causality between China's economic policy uncertainty and the growth of the substantial economy through bootstrap rolling window causality test, further refines economic policies and studies the causal differences between different types of economic policies and substantial economic growth, refining the conclusions of previous studies.

Design/methodology/approach

This paper first studies the causal relationship between China's economic policy uncertainty and substantial economic growth in the full sample period through bootstrap Granger causality test. Then, the paper tests the short-term and long-term stability of the parameters of the VAR model, and it is found that the model parameters are unstable in both the short and long term, so the results of the Granger causality test of the full sample are not credible. Finally, we conduct a dynamic test of the causal relationship between China's economic policy uncertainty and substantial economic growth by means of rolling window, so as to comprehensively analyze the dynamic characteristics and sudden changes of the relationship between them.

Findings

The research shows that economic policy uncertainty in China has a significant inhibiting effect on the growth of substantial economy. Growth in the substantial economy will drive up economic policy uncertainty before 2016 and restrain it after that. In addition, this paper further subdivides economic policy uncertainty to explore the causal differences between different types of economic policy uncertainty and substantial economic growth. The test results show that the relationship between them has obvious policy heterogeneity. The fiscal policy uncertainty and the monetary policy uncertainty, as the main policy means in China, has a significant impact on the growth rate of substantial economy in multiple ranges, but the effect time is short. Although trade policy uncertainty has a significant impact on the growth rate of substantial economy only during the financial crisis, the effect lasts for a long time. The impact of exchange rate and capital account policy uncertainty on the growth rate of substantial economy is mainly reflected after 2020.

Originality/value

The values of this paper are as follows: First, the economic policy uncertainty is combined with the growth of substantial economy, which makes up the gap of previous studies. Second, the economic policy uncertainty is further subdivided. The paper explores the causal differences between different types of economic policy uncertainties and the growth of substantial economy, so as to make the research more detailed. Finally, different from the previous static analysis, this paper uses dynamic model to examine the relationship between China's economic policy uncertainty and the growth of substantial economy from a dynamic perspective, with richer research conclusions.

Details

Marine Economics and Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2516-158X

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1 – 10 of over 116000