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1 – 10 of 37An evaluation of some silicone and epoxy materials for primary chip and top coatings on hybrid circuits and of their relative merits on the basis of humidity and temperature…
Abstract
An evaluation of some silicone and epoxy materials for primary chip and top coatings on hybrid circuits and of their relative merits on the basis of humidity and temperature cycling is presented.
For documents specialists it was a schizophrenic year. On the one hand we waded through a Bicentennial flood of historical publications extoling the significance of the past two…
Abstract
For documents specialists it was a schizophrenic year. On the one hand we waded through a Bicentennial flood of historical publications extoling the significance of the past two hundred years of federal existence. On the other we faced future shock as the Monthly Catalog was wedded to OCLC while the GPO moved further into micropublishing.
Abstract
Dhyani Mehta and M. Mallikarjun
This study aims to examine the impact of fiscal deficit, exchange rate and trade openness on current account deficit (CAD). The study tried to empirically investigate the ‘twin…
Abstract
Purpose
This study aims to examine the impact of fiscal deficit, exchange rate and trade openness on current account deficit (CAD). The study tried to empirically investigate the ‘twin deficits hypothesis’ and ‘compensation hypothesis’ in the Indian context.
Design/methodology/approach
Autoregressive distributed lagARDL) bound test approach was used by taking annual time series data from 1978 to 2021. The estimates confirm a significant long-run and short-run relationship between dependent variables, i.e. CAD and independent variables such as the fiscal deficit, exchange rate and trade openness.
Findings
The results show that positive shocks of all explanatory variables significantly affect the CAD. CAD and fiscal deficit are significantly associated, as the coefficient of fiscal deficit is positive and significant. The study also found that exchange rate and trade openness significantly affect the CAD. The coefficients of exchange rate and trade openness are positive and significant. The findings show that an increase in CADs results from liberal trade policies that help domestic industries grow their trade and expansionary fiscal policy, leading to a higher fiscal deficit. The negative and significant error correction term suggests that short-run disequilibrium converges to long-run equilibrium at a speed of 19.2%. The findings validate the ‘twin deficits hypothesis’ and ‘compensation hypothesis’ in the Indian context.
Practical implications
It can be inferred from the study that liberal policy to promote economic growth and trade openness should be designed and promoted judiciously. An excessive liberalised approach may impact other macroeconomic variables such as current account balances. Integrating the domestic market with global markets poses a big challenge for countries like India that aspire to penetrate global markets. Furthermore, the Indian policy makers should rigorously work and promote the policies such as Fiscal Responsibility and Budget Management (FRBM) as reduction in fiscal deficits, trade imbalances will also be reduced.
Originality/value
This study contributes to the existing literature on ‘twin deficit’ and trade openness by giving new evidence on the trilemma between designing sustainable fiscal policy by spending wisely without imperilling the country's global presence and CAD.
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Martins Iyoboyi, Latifah Musa-Pedro, Okereke Samuel Felix and Hussaina Sanusi
This paper examines the impact of fiscal constraints on education expenditure in Nigeria from 1981 to 2021, using annual time series data.
Abstract
Purpose
This paper examines the impact of fiscal constraints on education expenditure in Nigeria from 1981 to 2021, using annual time series data.
Design/methodology/approach
The study deployed cointegration techniques with structural breaks.
Findings
Cointegration was found between education expenditure, debt servicing (a proxy for fiscal constraint) and associated variables. In both the long and short run, debt servicing negatively and significantly impacts education expenditure. While government revenue has a positive and significant impact on education expenditure in the long and short run, political institution has a negative and significant impact in the long run. Political institution is thus critical to education financing in Nigeria. The impact of debt is positive and significant in the short run, but not significant in the long run. There is a unidirectional causality from debt servicing to education expenditure.
Practical implications
Political institutions are critical towards contracting only productive debts and checkmating the adverse political environment through political will that prioritizes education financing.
Originality/value
The study extends the empirical literature on the fiscal constraint-education expenditure first by investigating fiscal constraint-education expenditure nexus given the institutional environment, and second by extending the methodology using cointegration techniques in the midst of structural breaks.
Peer review
The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-10-2022-0682.
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Ola Al Sayed, Ashraf Samir and Heba Hesham Anwar
This paper aims to assess the fiscal sustainability in Egypt during the period 1990–2018 using deficit accounts (DA) approach. It also tries to investigate the possibility of…
Abstract
Purpose
This paper aims to assess the fiscal sustainability in Egypt during the period 1990–2018 using deficit accounts (DA) approach. It also tries to investigate the possibility of applying generational accounts (GA) in Egypt as a new approach to assess fiscal sustainability.
Design/methodology/approach
This paper tries to assess fiscal sustainability in Egypt during 1990–2018 using DA and GA approaches. DA approach includes primary deficit indicator, tax gap indicator, augmented Dickey-Fuller stationarity test for debt/GDP ratio and Johansen co-integration test between government revenues and expenditures. However, concerning the possibility of applying GA in Egypt, field study form was designed including specific questions to academic and executive economic experts to investigate if it is possible to apply GA in Egypt.
Findings
The empirical findings of the field study indicate that Egypt witnessed fiscal sustainability during the period 1990–2018 using DA. On the other hand, there are various obstacles, including administrative, technical, legal and political obstacles which hinder Egypt from applying GA to assess fiscal sustainability.
Originality/value
To the best of the authors' knowledge, this paper assesses fiscal sustainability in Egypt using DA for a longer and updated time series within 1990–2018. In addition, it is the first paper to examine the possibility of assessing fiscal sustainability using GA approach in Egypt.
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The purpose of this study is to empirically investigate the impact of aggregate federal personal income tax evasion on the real interest rate yield on 10-year Treasury notes…
Abstract
Purpose
The purpose of this study is to empirically investigate the impact of aggregate federal personal income tax evasion on the real interest rate yield on 10-year Treasury notes, 20-year Treasury bonds and 30-year US Treasury bonds.
Design/methodology/approach
An open-economy loanable funds model is developed, with income tax evasion expressly included in the specification in the form of the AGI (adjusted gross income) gap and the ratio of unreported AGI to actual AGI, expressed as a per cent.
Findings
The empirical estimations reveal compelling evidence that income tax evasion thus measured acts to elevate the real interest rate yields on 10-year Treasury notes and both 20-year and 30-year Treasury bonds, raising the possibility of a tax evasion-induced form of “crowding out”.
Research limitations/implications
Ideally, tax evasion data for a longer time period would be very useful.
Practical implications
To the extent that greater federal personal income tax evasion yields a higher interest rate yield on 10-year, 20-year and 30-year Treasury debt issues, it is likely that the tax evasion will also elevate other interest rates in the economy.
Social implications
Higher interest rates resulting from tax evasion would likely slow-down macroeconomic growth and accelerate unemployment.
Originality/value
Neither the tax evasion literature nor the interest rate literature has ever considered the impact of tax evasion behavior on long-term interest rates.
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Richard Cebula and Usha Nair-Reichert
This study investigates the impact of federal income tax rates and budget deficits on the nominal interest rate yield on high-grade municipal tax-free bonds (municipals) in the…
Abstract
Purpose
This study investigates the impact of federal income tax rates and budget deficits on the nominal interest rate yield on high-grade municipal tax-free bonds (municipals) in the US. The 58-year study period covers the years 1959 through 2016 and thus is very recent.
Design/methodology/approach
The study develops a loanable funds model that allows for various financial market factors. Once developed, the model is estimated by autoregressive two-stage least squares, with a Newey-West heteroskedasticity correction.
Findings
The nominal interest rate yield on municipals is a decreasing function of the maximum marginal federal personal income tax rate and an increasing function of the federal budget deficit (expressed as a per cent of GDP). This yield is also an increasing function of nominal interest rate yields on three- and ten-year treasury notes and expected inflation.
Research limitations/implications
When introducing additional interest rates such as treasury bills as explanatory variables, multi-collinearity becomes a serious problem.
Practical implications
This study indicates that lower maximum federal personal income tax rates and larger federal budget deficits, both act to raise borrowing costs for cities (of all sizes), counties and states across the country. Given the study period of 58 years, these relationships appear to be enduring ones that responsible policy-makers should not overlook.
Social implications
Tax reform and debt management need to be conducted in a very circumspect fashion.
Originality/value
No recent study investigating the impact of the two key policy variables in this study has been published.
Don Capener, Richard Cebula and Fabrizio Rossi
To investigate the impact of the federal budget deficit (expressed as a per cent of the Gross Domestic Product, GDP) in the US on the ex ante real interest rate yield on Moody’s…
Abstract
Purpose
To investigate the impact of the federal budget deficit (expressed as a per cent of the Gross Domestic Product, GDP) in the US on the ex ante real interest rate yield on Moody’s Baa-rated corporate bonds and to provide evidence that is both contemporary and covers an extended time period, namely, 1960 through 2015.
Design/methodology/approach
The analysis constructs a loanable funds model that involves a variety of financial and economic variables, with the ex ante real interest rate yield on Moody’s Baa-rated long-term corporate bonds as the dependent variable. The dependent variable is contemporaneous with the federal budget deficit and two other interest rate measures. Accordingly, instrumental variables are identified for each of these contemporaneous explanatory variables. The model also consists of four additional (lagged) explanatory variables. The model is then estimated using auto-regressive, i.e., AR(1), two-stage least squares.
Findings
The principal finding is that the ex ante real interest rate yield on Moody’s Baa rated corporate bonds is an increasing function of the federal budget deficit, expressed as a per cent of GDP. In particular, if the federal budget deficit were to rise by one per centage point, say from 3 to 4 per cent of GDP, the ex ante real interest rate would rise by 58 basis points.
Research limitations/implications
There are other time-series techniques that could be applied to the topic, such as co-integration, although the AR(1) process is tailored for studying volatile series such as interest rates and stock prices.
Practical/implications
The greater the US federal budget deficit, the greater the real cost of funds to firms. Hence, the high budget deficits of recent years have led to the crowding out of investment in new plant, new equipment, and new technology. These impacts lower economic growth and restrict prosperity in the US over time. Federal budget deficits must be substantially reduced so as to protect the US economy.
Social/implications
Higher budget deficits act to reduce investment in ew plant, new equipment and new technology. This in turn reduces job growth and real GDP growth and compromises the health of the economy.
Originality/value
This is the first study to focus on the impact of the federal budget deficit on the ex ante real long term cost of funds to firms in decades. Nearly all related studies fail to focus on this variable. Since, in theory, this variable (represented by the ex ante real yield on Moody’s Baa rated long term corporate bonds) is a key factor in corporate investment decisions, the empirical findings have potentially very significant implications for US firms and for the economy as a whole in view of the extraordinarily high budget deficits of recent years.
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Christine Clarke, Patrice Whitely and Travis Reid
This study aims to explore the sustainability of Jamaica’s public debt over a highly volatile period of time.
Abstract
Purpose
This study aims to explore the sustainability of Jamaica’s public debt over a highly volatile period of time.
Design/methodology/approach
The authors use a suite of econometric tools, including, unit root testing, cointegration testing and estimating a fiscal reaction function. The authors control for structural breaks in the regression analysis.
Findings
The authors find that whilst reschedulings might be indicative of cash-flow problems in Jamaica, fiscal policy has responded effectively to increase the public debt, thereby making the debt sustainable. Notwithstanding the political economy and social demands of the population prior to the impact of the pandemic, the implications of higher debt stocks (higher debt-servicing and lower social expenditures) might make this approach to fiscal policy and debt management infeasible. As a result, the authors recommend that the government will need to take an active approach in managing its debt position to facilitate responses to shocks and provide conditions within which maintaining fiscal discipline is feasible.
Originality/value
To the best of the authors’ knowledge, this is the first study to explore fiscal sustainability in Jamaica over this time period whilst taking into consideration structural breaks caused by the global financial crisis and debt restructurings. The authors also take into consideration variables such as exchange rates and the occurrence of elections, which have not been included in previous studies.
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