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This paper explores the evidence of a long-run co-movement between aggregate unemployment insurance spending and the labor force participation rate in the USA. The unemployment insurance (UI) program tends to expand during an economic downturn and contract during an expansion. UI may incentivize unemployment and may also facilitate better matching in the labor market. Statistical evidence of the presence of a co-movement will thus shed new light on their dynamics.

This research applies time-series econometric approach using monthly data from 1959:1 to 2020:3 to test threshold cointegration and estimate a threshold vector error-correction (TVEC) model. The estimates from the TVEC model investigating the nature of short-run dynamics.

The Enders and Siklos (2001) test find evidence of threshold cointegration between the two indicating the presence of long-run co-movement. The estimates from the TVEC model investigating the nature of short-run dynamics find evidence that the growth in aggregate UI spending and the growth in labor force participation rate adjust simultaneously to maintain the long-run co-movement above the threshold in the short run. The author also observes the same short-run dynamics for the growth in aggregate UI spending and the growth in the labor force participation rate for females.

This model is bi-variate by construction and does not address causality.

The author argues that the UI program positively impacts the female labor market outcomes, for example, better matching. This finding may explain the upward trend in the labor force participation rate for females in the USA.

The research findings may justify the transfer programs for minority and immigrants.

This is first research that analyzes the UI programs impact on the labor force participation using a macroeconometric approach. To the best of the author's knowledge, this is the first study in this genre.

The purpose of this paper is to investigate asymmetric cointegration and causality effects between financial development and economic growth for South African data spanning over the period of 1992-2013.

This study makes the use of the momentum threshold autoregressive (M-TAR) approach which allows for threshold error-correction (TEC) modeling and Granger causality analysis between the variables. In carrying out an empirical analysis, the author uses six measures of the financial development variables against gross domestic per capita, that is, three measures which proxy banking activity and another three proxies for stock market development.

The empirical results generally indicate an abrupt asymmetric cointegration relationship between banking activity and economic growth, on the one hand, and a smooth cointegration relationship between stock market activity and economic growth, on the other hand. Moreover, causality analysis generally reveals that while banking activity tends to Granger cause economic growth, stock market activity is, however, caused by economic growth increase.

This study contributes to the literature by examining asymmetries in the cointegration and causality relations by using both banking and stock market proxies against economic growth for the South African economy.

The purpose of this paper is to examine asymmetric co-integration effects between nutrition and economic growth for annual South African data from the period 1961-2013.

The authors deviate from the conventional assumption of linear co-integration and pragmatically incorporate asymmetric effects in the framework through a fusion of the momentum threshold autoregressive and threshold error correction (MTAR-TEC) model approaches, which essentially combines the adjustment asymmetry model of Enders and Silkos (2001); with causality analysis as introduced by Granger (1969); all encompassed by/within the threshold autoregressive (TAR) framework, a la Hansen (2000).

The findings obtained from the study uncover a number of interesting phenomena for the South Africa economy. First, in coherence with previous studies conducted for developing economies, the authors establish a positive relationship between nutrition and economic growth with an estimated income elasticity of nutritional intake of 0.15. Second, the authors find bi-direction causality between nutrition and economic growth with a stronger causal effect running from nutrition to economic growth. Lastly, the authors find that in the face of equilibrium shocks to the variables, policymakers are slow to responding to deviations of the variables from their co-integrated long run steady state equilibrium.

In the study, the authors make a novel contribution to the literature by exploring asymmetric modelling in the correlation between nutrition intake and economic growth for the exclusive case of South Africa.

This survey focuses on two families of nonlinear vector time series models, the family of vector threshold regression (VTR) models and that of vector smooth transition regression (VSTR) models. These two model classes contain incomplete models in the sense that strongly exogeneous variables are allowed in the equations. The emphasis is on stationary models, but the considerations also include nonstationary VTR and VSTR models with cointegrated variables. Model specification, estimation and evaluation is considered, and the use of the models illustrated by macroeconomic examples from the literature.

An important issue in defense economic literature has long been the modeling the arms race between rival countries. However, although various specifications with different data sets have been employed, little has been found in favor of a clear-cut arms race between the rivalries. Brauer (2002) and Dunne, Nikolaidu, and Smith (2005) provide excellent literature survey regarding the advantages and disadvantages of various specifications in modeling the arms race and/or data measurement issues leading to poor results, particularly in the case of Turkey and Greece. The possible arms race between India and Pakistan has also been a topic of interest for many researchers as the two have maintained a hostile relationship with one another since their creation as separate states in 1947. The religious differences between the two countries are believed to be the main reason of the partition and ongoing hostility, which led to an arms race (Tibbett & Akram-Lodhi, 1997; Deger & Sen, 1990; Alexander, 1987; Ganguly, 1995).

In the academic debate, the tax–growth relationship is always a controversial one. This paper aims to investigate the relationship between tax structure and economic growth in India for the period 1980-2016. After controlling for total tax revenue share to GDP in the estimation model, the authors examine the long-run and short-run relationship between tax structure and growth in India.

Auto-regressive distributed lag (ARDL) model has been used in this study. This bound cointegration model has certain advantages to the traditional cointegration model. This study also applies the threshold cointegration test of Hansen and Seo (2002) for examining non-linearity in tax–growth nexus.

The analysis shows that income tax share, corporation tax share and excise tax share are harmful to growth in the long-run. While the custom share is enlarging the growth performance. Corporation tax share is also reducing growth in the short-run. Following the Pesaran et al. (2001) approach of ARDL bound testing, the authors find the existence of a long-run relationship between studied variables. However, this study does not find any existence of threshold effect in the tax–growth relationship for India.

Based on the empirical findings, the author suggests that the prime tax change, which has the potential to impact both long-run growth and short-run economic recovery is the reduction of corporate tax rate with sustainable revenue generation. It will definitely enlarge the foreign direct investment, saving and investment in India.

This study will be a contribution to the empirical literature by investigating “tax–growth” relationship in the Indian case. To the knowledge, this will be the first study to examine this relationship for India with a recent data set.

The purpose of this paper is to analyze the influences of real share prices on aggregate consumption for Malaysia with the focus on whether there is asymmetry in the long‐run relation of the two variables.

The paper specifies aggregate consumption to depend on real income and real share prices. Alternatively, imposing long‐run budget constraint, the paper specifies the relation between aggregate consumption and real share prices as ratio to real income. Then, it applies an asymmetric cointegration and error correction modeling.

The cointegration tests indicate the presence of a long‐run relation between consumption‐income ratio and share price‐income ratio. More interestingly, while changes in share prices exert short‐run causal influences on Malaysia's private consumption, evidence is found for the adjustments of consumption – income ratio to the long‐run equilibrium path only when it is above its long‐run value. The paper interprets the finding as suggesting downward revisions in the consumption patterns when there are adverse shocks in share prices and, accordingly, supports the existence of especially negative wealth effect for Malaysia.

Owing to data limitations, the paper relies on aggregate consumption and aggregate income data. It acknowledges that the sum of non‐durable consumption and flow‐of‐services from durable purchases and labor income are more appropriate measures of, respectively, consumption and real income.

The findings have important implications for understanding consumption behavior in a developing country and can provide insight on the effectiveness of monetary policy.

In the literature on the effects of economic globalization, the compensation hypothesis suggests that there is a positive link between government size and external risk as governments perform a risk mitigating role to insure against productivity shocks through transfers. In contrast, the conventional wisdom hypothesis states that more openness will lower tax rates and lead to smaller government due to increased international factor mobility which undermines the ability of governments to tax. The purpose of this paper is to test the literature and present the authors' conclusions.

Using time series data for the USA, Canada, Japan and Australia over the period 1960‐2008, the authors test the asymmetric relationship between government size and terms‐of‐trade volatility by applying multivariate hidden cointegration analysis.

The findings show that high terms of trade volatility are positively related to government spending in the all sample countries. The effect is stronger in the case of positive movements than negative ones.

The policy implication is that the size of the public sector might play a risk‐reducing role in economies with significant amounts of external risk. In particular, public expenditure is considered to be an important fiscal policy instrument when terms of trade volatility are high.

The paper describes the first study of its kind.

The purpose of this paper is to assess price linkages and patterns of transmission among producer and consumer markets for apple in Slovenia.

Non-linear error correction models are applied. Non-linearities are allowed by means of threshold and multivariate local linear regression estimation techniques. Monthly prices over the period 2000-2011 are used in the empirical application.

Both techniques provide evidence of non-linearities in price adjustments. Findings suggest that producer and consumer prices tend to increase rather than decrease. Results also indicate that parametric threshold approaches may have difficulties in adequately representing price behavior dynamics.

The main contribution of this work to the literature relies on the fact that this is the first attempt to assess vertical price transmission in the apple sector in Central and Eastern European Country markets. Further, it is the first attempt to use multivariate local linear regression techniques in this context.

The purpose of this paper is to examine two novel theories that concern the relationship between stock market development (SMD) and foreign direct investment (FDI). The authors focus on Greece that was demoted to the emerging market category in 2013–2014 in the international lists.

This study is based on the period 1988–2014 that includes the sub-periods 1988–2001 (emerging market) and 2002–2014 (developed market). The authors adopt cointegration methods examining, on the one hand, if the relationship between SMD and FDI is positive or negative and, on the other hand, if it is long run or short run. The authors complete the analysis using the Markov Switching regression model for the test of robustness.

The results exhibit a weak positive and symmetric long-run relationship for the full period. In the first sub-period, the relationship is strong but in the second sub-period it is not significant. The results are confirmed by the Markov Switching regression model.

The precise definition of a theoretical framework that is tested by a compact empirical methodology leads to a novel suggested policy that will upgrade the Greek market to developed market as soon as possible.