The purpose of this study was to examine the effect of real exchange rate volatility between the Canadian dollar and United States (US) dollar on real exports from Canada. The study made use of quarterly data from 1960-2017; over half a century. The GARCH (1, 1) was used to model real exchange rate volatility. After finding the variables were non-stationary with no evidence of co-integration, a Vector Autoregression (VAR) model was used to investigate the short-run relationship in the variables making use of the Granger causality technique and impulse response functions. The results reveal that the effect of exchange rate volatility between the Canadian dollar and the US dollar is of mixed signs, with coefficients that are not statistically significant, thus, exchange rate volatility does not have an effect on the real exports of Canada to the US. In addition, the real exchange rate volatility does not Granger cause real exports. This result contradicts economic theory that predicts a negative effect of exchange rate volatility on exports. However, Tenreryo (2007) and Aristotelous (2001) report the same result in their studies.
{"title":"The Effect of Exchange Rate Volatility on Exports: The Case of Canada’s Exports to United States","authors":"Emmanuel Erem","doi":"10.5539/ijef.v16n8p65","DOIUrl":"https://doi.org/10.5539/ijef.v16n8p65","url":null,"abstract":"The purpose of this study was to examine the effect of real exchange rate volatility between the Canadian dollar and United States (US) dollar on real exports from Canada. The study made use of quarterly data from 1960-2017; over half a century. The GARCH (1, 1) was used to model real exchange rate volatility. After finding the variables were non-stationary with no evidence of co-integration, a Vector Autoregression (VAR) model was used to investigate the short-run relationship in the variables making use of the Granger causality technique and impulse response functions. \u0000 \u0000The results reveal that the effect of exchange rate volatility between the Canadian dollar and the US dollar is of mixed signs, with coefficients that are not statistically significant, thus, exchange rate volatility does not have an effect on the real exports of Canada to the US. In addition, the real exchange rate volatility does not Granger cause real exports. This result contradicts economic theory that predicts a negative effect of exchange rate volatility on exports. However, Tenreryo (2007) and Aristotelous (2001) report the same result in their studies.","PeriodicalId":508422,"journal":{"name":"International Journal of Economics and Finance","volume":"99 6","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141802332","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Mohamud Dahir Hilif, Dayah Abdi Kulmie, Burhan Mohamed Osman
Islamic financial institutions are obliged to adhere to Shari’ah principles, which promote ethical financial transactions. These institutions prioritize not only their business concerns but also strive towards broader socio-economic development objectives. Microcredit services play a crucial role in facilitating the achievement of these goals and aligning with the overarching Shari’ah objectives. The purpose of this research is to scrutinize the impact of Islamic microcredit on the economic advancement of women in Somalia. To explore the correlation between microcredit provision and women’s economic progression, a correlational research design was selected as an appropriate approach. Primary data collected from 135 respondents were then subject to analysis using SPSS software. Substantive evidence emerged suggesting a substantial positive association between microcredit services and women’s economic development. Consequently, our findings demonstrate that both microcredit provision and overall economic progress exhibit statistically significant positive effects on the economic advancement experienced by women within Somalia. The research findings suggest that a higher degree of adoption of microcredit services has the potential to enhance women’s financial status, self-assurance, and improve their chances for uplifting themselves from poverty. Consequently, these outcomes can contribute to the overall progress and well-being of society as a whole.
{"title":"The Impact of Islamic Microcredit on Economic Development of Women in Somalia","authors":"Mohamud Dahir Hilif, Dayah Abdi Kulmie, Burhan Mohamed Osman","doi":"10.5539/ijef.v16n8p31","DOIUrl":"https://doi.org/10.5539/ijef.v16n8p31","url":null,"abstract":"Islamic financial institutions are obliged to adhere to Shari’ah principles, which promote ethical financial transactions. These institutions prioritize not only their business concerns but also strive towards broader socio-economic development objectives. Microcredit services play a crucial role in facilitating the achievement of these goals and aligning with the overarching Shari’ah objectives. The purpose of this research is to scrutinize the impact of Islamic microcredit on the economic advancement of women in Somalia. To explore the correlation between microcredit provision and women’s economic progression, a correlational research design was selected as an appropriate approach. Primary data collected from 135 respondents were then subject to analysis using SPSS software. Substantive evidence emerged suggesting a substantial positive association between microcredit services and women’s economic development. Consequently, our findings demonstrate that both microcredit provision and overall economic progress exhibit statistically significant positive effects on the economic advancement experienced by women within Somalia. The research findings suggest that a higher degree of adoption of microcredit services has the potential to enhance women’s financial status, self-assurance, and improve their chances for uplifting themselves from poverty. Consequently, these outcomes can contribute to the overall progress and well-being of society as a whole.","PeriodicalId":508422,"journal":{"name":"International Journal of Economics and Finance","volume":"48 19","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141644448","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Rosângela Aparecida da Silva Franchi, Eduardo Gomes Salgado
This study aims to carry out patent prospecting for the fertilizer product. The justification for such a proposal lies in the relevance and application of the information that patent documents can provide about an invention. Furthermore, it considers the current scenario of Brazil’s dependence on the import of fertilizers, bearing in mind its position in the global agribusiness. To this end, the study develops a refined analysis of patent applications in the DERWENT database with code C05F of the IPC Green Inventory of the World Intellectual Property Organization (WIPO), following a time frame between 1986 and the 2010 and 2023 period. Among the main results, the study shows that the technological information in patent documents can be helpful to Brazil’s development of eco-friendly technologies. To corroborate this statement, there are 6,337 inventions with IPC code C05F that have not been filed in the country that can be analysed, studied, and used since they have not been patented in its territory. By pointing out the exponential evolution of patent filing requests with code C05F from WIPO’s IPC Green Inventory in the world, the study shows that China is the country with the highest number of patent filing requests with that code, via PCT (n=6,476 requests). On the other hand, the analysis shows that, excluding China, Brazil ranks 5th in the number of patent filings (n=45). However, compared to Russia (n=153) and South Korea (n=143), the number of requests is significantly lower. The study also shows that Brazil has filed significantly fewer patent applications for code C05F in WIPO’s IPC Green Inventory per year when compared to other countries, with less than five filings in the period, highlighting the discrepancy between the country´s need to consume the fertilizer product and its presence in global agribusiness. In conclusion, this patent prospection highlights the importance of research into environmentally sustainable technologies, especially when it comes to Brazilian agribusiness, as well as demonstrating that there is a lot of technology that can be used in Brazil at zero cost, taking into account the information contained in the patent documents worldwide.
{"title":"Patent Prospecting: Maping of Patent Applications Filings for the Fertilizer Product as Green Technology Over the Last Decade","authors":"Rosângela Aparecida da Silva Franchi, Eduardo Gomes Salgado","doi":"10.5539/ijef.v16n8p50","DOIUrl":"https://doi.org/10.5539/ijef.v16n8p50","url":null,"abstract":"This study aims to carry out patent prospecting for the fertilizer product. The justification for such a proposal lies in the relevance and application of the information that patent documents can provide about an invention. Furthermore, it considers the current scenario of Brazil’s dependence on the import of fertilizers, bearing in mind its position in the global agribusiness. To this end, the study develops a refined analysis of patent applications in the DERWENT database with code C05F of the IPC Green Inventory of the World Intellectual Property Organization (WIPO), following a time frame between 1986 and the 2010 and 2023 period. Among the main results, the study shows that the technological information in patent documents can be helpful to Brazil’s development of eco-friendly technologies. To corroborate this statement, there are 6,337 inventions with IPC code C05F that have not been filed in the country that can be analysed, studied, and used since they have not been patented in its territory. By pointing out the exponential evolution of patent filing requests with code C05F from WIPO’s IPC Green Inventory in the world, the study shows that China is the country with the highest number of patent filing requests with that code, via PCT (n=6,476 requests). On the other hand, the analysis shows that, excluding China, Brazil ranks 5th in the number of patent filings (n=45). However, compared to Russia (n=153) and South Korea (n=143), the number of requests is significantly lower. The study also shows that Brazil has filed significantly fewer patent applications for code C05F in WIPO’s IPC Green Inventory per year when compared to other countries, with less than five filings in the period, highlighting the discrepancy between the country´s need to consume the fertilizer product and its presence in global agribusiness. In conclusion, this patent prospection highlights the importance of research into environmentally sustainable technologies, especially when it comes to Brazilian agribusiness, as well as demonstrating that there is a lot of technology that can be used in Brazil at zero cost, taking into account the information contained in the patent documents worldwide.","PeriodicalId":508422,"journal":{"name":"International Journal of Economics and Finance","volume":"45 16","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141645123","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The power sector’s efficiency is paramount in a country such as India, where electricity consumption and access have been tantamount to economic growth. The study investigates whether Billing Efficiency is affected by Per Capita GSDP. A panel has been constructed using data from 17 major states from 2011-12 to 2021-22. The results, obtained using the Generalized Method of Moments (GMM) regression, suggest that Billing Efficiency increases when there is an increase in Per Capita GSDP. People’s affinity to evade paying the bill decreased when their incomes rose. Per Capita Consumption of Power, which the study considered the control variable, exhibited no impact on Billing Efficiency. Estimates indicate an increase of Rs. 10,000 per annum in Per Capita GSDP will increase Billing Efficiency by 0.31%. High-income states showed higher billing efficiency; the intuitive opposite was true for low-income states. As best practice, long-term investment in infrastructure can be a robust solution to reduce the leakages in Input Energy gradually.
{"title":"Demand-Side Determinants of Billing Efficiency in India: A Panel GMM Approach","authors":"Upendra Nath Behera, A. Mohanty, Swastik Routray","doi":"10.5539/ijef.v16n8p40","DOIUrl":"https://doi.org/10.5539/ijef.v16n8p40","url":null,"abstract":"The power sector’s efficiency is paramount in a country such as India, where electricity consumption and access have been tantamount to economic growth. The study investigates whether Billing Efficiency is affected by Per Capita GSDP. A panel has been constructed using data from 17 major states from 2011-12 to 2021-22. The results, obtained using the Generalized Method of Moments (GMM) regression, suggest that Billing Efficiency increases when there is an increase in Per Capita GSDP. People’s affinity to evade paying the bill decreased when their incomes rose. Per Capita Consumption of Power, which the study considered the control variable, exhibited no impact on Billing Efficiency. Estimates indicate an increase of Rs. 10,000 per annum in Per Capita GSDP will increase Billing Efficiency by 0.31%. High-income states showed higher billing efficiency; the intuitive opposite was true for low-income states. As best practice, long-term investment in infrastructure can be a robust solution to reduce the leakages in Input Energy gradually.","PeriodicalId":508422,"journal":{"name":"International Journal of Economics and Finance","volume":"5 6","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141646247","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
R. H. Machado, Everton Anger Cavalheiro, Érico Kunde Corrêa, Leonardo Betemps Kontz
This study aims to investigate the complex interplay between GDP per capita, innovation index, and environmental performance across a comprehensive dataset comprising 102 countries spanning from 2008 to 2022. Utilizing descriptive statistics, cointegration tests, and Granger causality analysis, the research delves into the intricate relationships among these pivotal variables. The findings unveil significant long-term equilibrium relationships among environmental performance, innovation, and economic development. Furthermore, bidirectional causal links are discerned, indicating that enhancements in environmental performance stimulate innovation, and conversely, innovation influences environmental performance. Likewise, economic development exerts influence on both innovation and environmental performance. These insightful revelations underscore the multifaceted dynamics among economic growth, innovation, and sustainability, thereby underscoring the imperative for integrated approaches to foster sustainable development. The comprehension and harnessing of these interrelationships are paramount for crafting efficacious policies and strategic business initiatives geared towards steering humanity toward a more sustainable and prosperous future.
{"title":"Integrating Economic Development, Innovation, and Environmental Performance for Sustainable Futures: Insights from a Global Study","authors":"R. H. Machado, Everton Anger Cavalheiro, Érico Kunde Corrêa, Leonardo Betemps Kontz","doi":"10.5539/ijef.v16n8p16","DOIUrl":"https://doi.org/10.5539/ijef.v16n8p16","url":null,"abstract":"This study aims to investigate the complex interplay between GDP per capita, innovation index, and environmental performance across a comprehensive dataset comprising 102 countries spanning from 2008 to 2022. Utilizing descriptive statistics, cointegration tests, and Granger causality analysis, the research delves into the intricate relationships among these pivotal variables. The findings unveil significant long-term equilibrium relationships among environmental performance, innovation, and economic development. Furthermore, bidirectional causal links are discerned, indicating that enhancements in environmental performance stimulate innovation, and conversely, innovation influences environmental performance. Likewise, economic development exerts influence on both innovation and environmental performance. These insightful revelations underscore the multifaceted dynamics among economic growth, innovation, and sustainability, thereby underscoring the imperative for integrated approaches to foster sustainable development. The comprehension and harnessing of these interrelationships are paramount for crafting efficacious policies and strategic business initiatives geared towards steering humanity toward a more sustainable and prosperous future.","PeriodicalId":508422,"journal":{"name":"International Journal of Economics and Finance","volume":" 21","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141676525","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
O. Khodr, M. Tessmann, Humberto Nunes Alencar, A. Pinto
This paper employs the VAR model to analyze interrelations among key macroeconomic variables, emphasizing unemployment, inflation, and the Fed Funds rate. The model reveals asymmetry in the unemployment-Fed Funds rate relationship, emphasizing the unique influence of unemployment. Lagged values contribute to understanding temporal dependencies, highlighting positive associations between lagged and current inflation. Impulse response analysis and the covariance matrix validate the IS-LM model and Stock and Watson’s (2001) findings. Forecasts anticipate increased unemployment and a slight Fed Funds rate decrease, though accuracy tests reveal reliability issues, especially for the Fed Funds rate. ADF tests support stationarity for inflation and unemployment showing a weak indication against the unit root hypothesis for the Fed Funds rate. Lastly, SARIMA, ARIMA, and DM tests suggest performance differences, pointing to avenues for future research to enhance precision, address reliability issues, and explore variations between SARIMA and VAR models, potentially in a cross-country comparative context.
本文采用 VAR 模型分析主要宏观经济变量之间的相互关系，重点关注失业率、通货膨胀率和联邦基金利率。该模型揭示了失业率与联邦基金利率关系的不对称性，强调了失业率的独特影响。滞后值有助于理解时间依赖性，突出了滞后通胀与当前通胀之间的正相关关系。脉冲响应分析和协方差矩阵验证了 IS-LM 模型以及 Stock 和 Watson（2001 年）的研究结果。预测预计失业率会上升，联邦基金利率会略有下降，但准确性测试表明存在可靠性问题，特别是联邦基金利率。ADF 检验支持通货膨胀和失业率的静态性，但对联邦基金利率的单位根假设显示出微弱的迹象。最后，SARIMA、ARIMA 和 DM 检验显示出性能差异，这为今后的研究指明了方向，以提高精确度、解决可靠性问题，并探索 SARIMA 模型和 VAR 模型之间的差异，有可能在跨国比较的背景下进行。
{"title":"Identifying the Temporal Dynamics and Macroeconomic Interactions of the US Economy","authors":"O. Khodr, M. Tessmann, Humberto Nunes Alencar, A. Pinto","doi":"10.5539/ijef.v16n8p1","DOIUrl":"https://doi.org/10.5539/ijef.v16n8p1","url":null,"abstract":"This paper employs the VAR model to analyze interrelations among key macroeconomic variables, emphasizing unemployment, inflation, and the Fed Funds rate. The model reveals asymmetry in the unemployment-Fed Funds rate relationship, emphasizing the unique influence of unemployment. Lagged values contribute to understanding temporal dependencies, highlighting positive associations between lagged and current inflation. Impulse response analysis and the covariance matrix validate the IS-LM model and Stock and Watson’s (2001) findings. Forecasts anticipate increased unemployment and a slight Fed Funds rate decrease, though accuracy tests reveal reliability issues, especially for the Fed Funds rate. ADF tests support stationarity for inflation and unemployment showing a weak indication against the unit root hypothesis for the Fed Funds rate. Lastly, SARIMA, ARIMA, and DM tests suggest performance differences, pointing to avenues for future research to enhance precision, address reliability issues, and explore variations between SARIMA and VAR models, potentially in a cross-country comparative context.","PeriodicalId":508422,"journal":{"name":"International Journal of Economics and Finance","volume":" 7","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141680946","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article examines the persistent phenomenon of “home bias” and its determinants in international portfolio management, with a particular focus on the inherent challenges posed by the puzzle of preference for domestic assets and its impact on financial markets, highlighting the period of the COVID-19 pandemic. Utilizing a multiple linear regression model, estimated through Ordinary Least Squares (OLS) method, applied to data covering 43 countries over a 15-year period, this study reveals that home bias remains more pronounced in emerging economies, with significant variations in terms of factors such as economic development, governance, financial openness, information asymmetry, technology, and other explanatory variables. The findings underscore the crucial importance of understanding the underlying mechanisms of home bias, especially during financial crises, for investors, regulators, and policymakers. Additionally, the article suggests that information asymmetry continues to play a vital role in this preference, but other economic and behavioral factors also influence foreign investment decisions.
{"title":"The Home Bias: Evolution, Determinants, and Financial Crises","authors":"Rifa Atrous, Ezzeddine Abaoub","doi":"10.5539/ijef.v16n7p60","DOIUrl":"https://doi.org/10.5539/ijef.v16n7p60","url":null,"abstract":"This article examines the persistent phenomenon of “home bias” and its determinants in international portfolio management, with a particular focus on the inherent challenges posed by the puzzle of preference for domestic assets and its impact on financial markets, highlighting the period of the COVID-19 pandemic. Utilizing a multiple linear regression model, estimated through Ordinary Least Squares (OLS) method, applied to data covering 43 countries over a 15-year period, this study reveals that home bias remains more pronounced in emerging economies, with significant variations in terms of factors such as economic development, governance, financial openness, information asymmetry, technology, and other explanatory variables. The findings underscore the crucial importance of understanding the underlying mechanisms of home bias, especially during financial crises, for investors, regulators, and policymakers. Additionally, the article suggests that information asymmetry continues to play a vital role in this preference, but other economic and behavioral factors also influence foreign investment decisions.","PeriodicalId":508422,"journal":{"name":"International Journal of Economics and Finance","volume":"51 37","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-06-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141383863","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines the effect of the spatial dependence of the number of bank branches on the supply of credit in West African Economic and Monetary Union (WAEMU) countries, over the period 1995-2021. Methodologically, we mobilize spatial econometric techniques to take into account the spatial interdependence between the various countries involved in the analysis. Results from the SDM (Spatial Durbin Spatial) model reveal that the number of bank branches has a positive and significant influence on credit supply. In addition, bank size has a positive effect on credit supply. Nevertheless, inflation hurts the credit supply. Considering spatial effects has also shown us that the supply of credit from one country to another also depends on the volume of credit it receives from other countries. In terms of economic policy implications, banks in the zone need to promote the strategy of geographic expansion of their bank branches. Similarly, monetary authorities need to make efforts to keep inflation rates at moderate, stable levels, and encourage the emergence of large banks.
{"title":"Number of Bank Agencies and Bank Credit Supply in Waemu Zone: A Spatial Econometric Approach","authors":"Prao Yao Séraphin","doi":"10.5539/ijef.v16n7p26","DOIUrl":"https://doi.org/10.5539/ijef.v16n7p26","url":null,"abstract":"This study examines the effect of the spatial dependence of the number of bank branches on the supply of credit in West African Economic and Monetary Union (WAEMU) countries, over the period 1995-2021. Methodologically, we mobilize spatial econometric techniques to take into account the spatial interdependence between the various countries involved in the analysis. Results from the SDM (Spatial Durbin Spatial) model reveal that the number of bank branches has a positive and significant influence on credit supply. In addition, bank size has a positive effect on credit supply. Nevertheless, inflation hurts the credit supply. Considering spatial effects has also shown us that the supply of credit from one country to another also depends on the volume of credit it receives from other countries. In terms of economic policy implications, banks in the zone need to promote the strategy of geographic expansion of their bank branches. Similarly, monetary authorities need to make efforts to keep inflation rates at moderate, stable levels, and encourage the emergence of large banks.","PeriodicalId":508422,"journal":{"name":"International Journal of Economics and Finance","volume":"2 4","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-06-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141265426","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study analysed the relationship between fiscal deficit and economic growth in the East African Community (EAC) at both regional and country level. The Pooled Mean Group (PMG) estimation technique was employed and panel data for the period between 2000 and 2021 to meet objectives of the study. PMG estimator gave both long run and short run regional outcomes and country-specific short run results. The findings indicate that there is a positive relationship between fiscal deficit and economic growth, with significance level of 1% observed in the long term. The country specific short run results reveal a negative link between fiscal deficit and economic growth in Burundi, Kenya and Rwanda while for Tanzania and Uganda the link is positive and significant. Real interest rate and inflation rate deteriorate economic growth in the EAC. Broad money supply growth and foreign direct investment boost economic activity in the EAC region. Fiscal restraint and discipline are required to promote economic growth in the region. There is need for governments to ensure price and interest rate stability through inflation targeting and limiting money supply.
{"title":"Impact of Fiscal Deficits on Economic Growth in the East African Community","authors":"Ruth Muendi Muinga, John Gathiaka, K. Osoro","doi":"10.5539/ijef.v16n7p39","DOIUrl":"https://doi.org/10.5539/ijef.v16n7p39","url":null,"abstract":"This study analysed the relationship between fiscal deficit and economic growth in the East African Community (EAC) at both regional and country level. The Pooled Mean Group (PMG) estimation technique was employed and panel data for the period between 2000 and 2021 to meet objectives of the study. PMG estimator gave both long run and short run regional outcomes and country-specific short run results. The findings indicate that there is a positive relationship between fiscal deficit and economic growth, with significance level of 1% observed in the long term. The country specific short run results reveal a negative link between fiscal deficit and economic growth in Burundi, Kenya and Rwanda while for Tanzania and Uganda the link is positive and significant. Real interest rate and inflation rate deteriorate economic growth in the EAC. Broad money supply growth and foreign direct investment boost economic activity in the EAC region. Fiscal restraint and discipline are required to promote economic growth in the region. There is need for governments to ensure price and interest rate stability through inflation targeting and limiting money supply.","PeriodicalId":508422,"journal":{"name":"International Journal of Economics and Finance","volume":"286 9","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-06-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141386637","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The central Hicks hypotheses were tested using a behavioral science and the model with capacity effects and price changes. In a further step, the model was expanded to include interest-dependent investments. The Hicks hypotheses were confirmed. Demand created demand via induced investment, which led to an upward process, and the mere decline in demand growth already initiated a downward process. Errors by the central bank in controlling interest rates triggered economic fluctuations. Governments and central banks should be careful if they want to stimulate the economy through increased demand and low interest rates. The risk of overstimulation is great.
{"title":"Investments as Business Cycle Trigger - Testing Hicks-Model hypotheses with Demand and Interest Rate Changes: Evidence from Two Behavioral Experiments","authors":"Christian A. Conrad","doi":"10.5539/ijef.v16n7p51","DOIUrl":"https://doi.org/10.5539/ijef.v16n7p51","url":null,"abstract":"The central Hicks hypotheses were tested using a behavioral science and the model with capacity effects and price changes. In a further step, the model was expanded to include interest-dependent investments. The Hicks hypotheses were confirmed. Demand created demand via induced investment, which led to an upward process, and the mere decline in demand growth already initiated a downward process. Errors by the central bank in controlling interest rates triggered economic fluctuations. Governments and central banks should be careful if they want to stimulate the economy through increased demand and low interest rates. The risk of overstimulation is great.","PeriodicalId":508422,"journal":{"name":"International Journal of Economics and Finance","volume":"34 12","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-06-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141384978","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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