Abstract: This study inspects if there is greater convergence with Germany amongst the Eurozone founding members and if their relations with the hegemonic economy have been more symmetrical after “euroization”. The dimensions explored are those inspired by the optimum currency areas (OCA) framework. To some extent, the findings could signify if real convergence has been significantly endogenous. At the same time, to assess the relative dominance of Germany, the features against Germany are compared to those against US. In addition, the paper also appraises some aspects of economic performance to check whether economic conditions across the states have improved and converged after unification. In some convergence aspects, findings suggest remarkable convergence with Germany and across the states but also relative convergence with US. On economic performance, results indicate substantial improvements in inflation and unemployment. Amongst the founding states, Ireland has idiosyncratically shown serious divergences in a number of the convergence and performance measures.
Abstract: The study reveals that there is a relationship between foreign direct investments, trade, and growth rate of per capita GDP for Bangladesh with the help of annual time series data for 1973 to 2014. The Vector Error Correction Model (VECM) analysis shows that there is a long-term relationship between these variables. To check the validity of the VECM model, we did a few post-estimation diagnostic tests, and found that the residuals of the regressions have a normal distribution and do not show any auto-correlation. The trade and foreign investment variables have a significant impact on the growth rate of GDP per capita. Because FDI and trade are two important components of economic growth in Bangladesh, it is important to frame policies that promote growth and reduce the barriers for capital flows.
Abstract: The purpose of this paper is to evaluate the behavior of monetary authorities in Tunisia and Egypt, in response to changes in macroeconomic variables over time based on LSTR model. In this sense, we estimate Taylor-type equations for short-term interest rate in Tunisia and Egypt using quarterly data covering the period 1998.Q4–2013.Q2. We find strong evidence that the real decision-making process followed by these central banks varies from one central bank to another and that it exhibits nonlinear patterns that better capture special events and unexpected contingencies i.e., the terrorist attack in the US in September 2001, the global financial crisis in 2008, and the effect of political instability with the onset of the revolution. Additionally, the presence of asymmetries in the reaction function of the Tunisian and Egyptian Bank requires disconnection from their automatic pilot rules and use of judgement to make decisions.
Abstract: This study looks at some non-conventional determinants of economic growth, with the help of the newly developed economic freedom index datasets of the Heritage Foundation/Wall Street Journal(HF/WSJ), which is a cumulative index derived from several sub-indices (trade freedom index, financial freedom, labor freedom, business and fiscal freedom index). The cumulative economic freedom index show us how open and business friendly a country is. The sub-indices show us openness across different sector of the economy, for example, the financial sector or the trade sector etc. Traditional neo-classical economic theories have explained economic growth looking at the supply of labor, capital and state of technology, with little attention being paid to institutional factors. The study presents evidence based on two panel data-sets. The first set consists of 186 countries over the period 2013, 2014 and 2015 that show institutional factors play a crucial role in economic growth. A second data-set with data for 57 countries for the period 2004–2014 also show a positive impact on the index on the growth rate of per capita GDP.
Abstract: Differences in trust levels between countries explain the observed discrepancies in entrepreneurial spirit amongst them. We test this hypothesis with a cross-section of 60 countries in 2010. Our findings suggest that about half of the variation in entrepreneurial spirit across countries in the world is driven by trust considerations. This result is robust to regional clustering, outliers and alternative conditioning variables. The findings of the study indicate that while formal incentives to nurture entrepreneurship must be maintained, policy makers should also seek to pay attention to the role of trust cultivated through informal networks.
Abstract: The travel and tourism industry has been growing in importance for several developing countries. It has not only generated considerable foreign exchange revenues but has also contributed to the overall output and socio-economic development of these countries. Within the Asia and Pacific region, data for 2014 indicates that Malaysia was ranked very highly at no. 26 out of the 184 countries in the world in terms of the relative importance of the contribution of the travel and tourism industry to its national output. In this light, this paper aims to undertake an empirical examination of the factors driving international tourist arrivals into Malaysia. The paper attempts to identify the causal determinants of the growth of the travel and tourism industry, using quarterly data from 2000 to 2012, under a Geweke causality framework. The empirical results suggest Malaysia’s government expenditures on tourism promotion as well as infrastructure investments such as enhancing airport facilities are causal and significant determinants of growth in the travel and tourism industry.