Search Results (31)

Climate change imposes severe constraints on global food security, yet evidence on how crops respond to climate change in irrigation-dominated systems remains limited compared with rainfed agriculture. Building on this gap, we investigated how asymmetric climate shocks influence rice production in a major irrigated setting, using Egypt’s Nile Delta as a case study. Drawing on annual data for 1961–2022, we estimated a nonlinear autoregressive distributed lag (NARDL) model in which harvested area, fertilizer use, and seasonal temperature and precipitation jointly determine rice output, with structural-break tests used to inform model specification and the historical interpretation of major water and agricultural policy reforms. Temperature and precipitation are decomposed into cumulative positive and negative partial sums to isolate the effects of warming versus cooling and of rainfall surpluses versus deficits. The results showed a stable long-run cointegrating relationship with pronounced asymmetries. Autumn temperature shocks were most strongly associated with production variation, with cooling shocks more damaging than warming shocks were beneficial, while precipitation effects were asymmetric in the opposite direction: production gains associated with above average rainfall years exceeded the losses associated with below average rainfall years, consistent with irrigation buffering rainfall shortfalls. This finding does not rule out drainage-related losses from extreme, short-duration rainfall events, which the annual precipitation total used here cannot separately identify. Land expansion and fertilizer intensification remain positively associated with rice output, yet they only partially offset climate-induced losses, underscoring the limits of input-based adaptation amid increasing climatic volatility. Overall, the findings suggest that irrigation systems face distinct climate risks often obscured in symmetric models, highlighting adaptation priorities in drainage and storage, sustainable use of marginal lands, and season-specific climate services for irrigated rice regions. Full article

This paper examines the asymmetric association between economic diversification and gross domestic product (GDP) growth volatility in the Gulf Cooperation Council (GCC) countries during the period 2000–2022. GDP growth volatility is measured using the rolling five-year standard deviation of real GDP growth. Economic diversification is measured using a Composite Economic Diversification Index (CEDIX), which is constructed through principal component analysis (PCA) and comprises export, fiscal revenue, and sectoral diversification. The index is rescaled to the unit interval and is decomposed into cumulative positive and negative partial sums in order to distinguish between diversification gains and diversification deteriorations. The empirical methodology includes cross-sectional dependence, panel unit-root and cointegration tests, and then the estimation of a pooled mean group nonlinear autoregressive distributed lag (PMG-NARDL) model. The results indicate a long-run relationship between growth volatility and its determinants, with significant long-run asymmetry between diversification gains and diversification deteriorations. Diversification gains are linked to lower volatility of GDP growth, whereas diversification deteriorations are linked to higher volatility. This suggests that deteriorations in diversification may be more strongly associated with macroeconomic instability than diversification gains are associated with stabilization. Short-run diversification effects are statistically insignificant, and the Wald test does not support short-run asymmetry. These results are consistent with the notion that diversification is more strongly associated with long-run resilience than with short-term stabilization. Full article

This study examines the nature and stability of the relationship between government spending and gross national income in South Africa, with a focus on whether fiscal dynamics are consistent with Wagner’s Law. Using annual data from 1990 to 2024, the study employs nonlinear autoregressive distributed lag (NARDL) and time-varying parameter (TVP) models to capture both asymmetric and changing fiscal dynamics. The findings show that positive income shocks have a modest, marginally significant effect on government spending, while negative shocks have no significant impact. This asymmetry suggests spending rigidity rather than a structured Wagnerian relationship. The bounds test fails to establish cointegration, and short-run Granger causality tests reveal no predictive influence in either direction. Multiple structural breaks (concentrated around 1994, 2008, 2009, 2017, and 2018) show that South Africa’s fiscal behaviour evolves through distinct regimes rather than following a consistent path. These findings imply that the income–spending relationship is unstable and regime-dependent, with limited and conditional evidence consistent with Wagner’s Law and no evidence of a systematic or stable Wagnerian relationship. The study concludes that South Africa’s fiscal planning should use medium-term frameworks that account for regime-dependent behaviour and structural instability rather than relying on stable long-run fiscal multipliers. Full article

This study investigates the asymmetric and heterogeneous effects of renewable energy, non-renewable energy, capital stock, labour, and trade openness on CO₂ emissions in BRICS countries over the period 1991–2022. The study applies a panel nonlinear autoregressive distributed lag (PNARDL) model to capture short- and long-run asymmetries, complemented by a panel quantile nonlinear ARDL (QNARDL) to assess distributional heterogeneity. Robustness is ensured using Fully Modified Ordinary Least Squares (FMOLS) and Robust Least Squares (RLS) estimators. The study is grounded in the Environmental Kuznets Curve (EKC) and Just Energy Transition Theory. The results reveal a stable long-run cointegrating relationship among the variables, with a significant error correction mechanism confirming convergence toward equilibrium. Renewable energy consumption consistently reduces CO₂ emissions in both the short and long run, while non-renewable energy significantly increases emissions, exhibiting strong asymmetric effects. Capital stock shows mixed dynamics, increasing emissions in the short run but reducing them in the long run when directed toward productive and efficient investments. Labour is found to reduce emissions in the long run, highlighting the role of human capital in supporting cleaner production. Trade openness generally increases emissions, reflecting energy-intensive trade structures. Quantile results confirm heterogeneity, with stronger renewable energy effects at higher emission levels and greater environmental gains from reducing fossil fuel dependence than from increasing it. The FMOLS and RLS estimations confirm robustness, reinforcing the negative relationship between renewable energy and emissions and the positive impact of non-renewable energy. The study recommends accelerated renewable energy deployment, fossil fuel phase-down strategies, and targeted green capital investment. It further emphasizes grid modernization and energy storage systems to enhance renewable integration, alongside labour reskilling and green trade policies. These coordinated strategies are essential for achieving sustainable decarbonization in BRICS economies. Full article

This study analyzes the asymmetric effects of oil prices on Saudi Arabia’s trade balance from 1990 to 2024 using a nonlinear autoregressive distributed lag (NARDL) model. By decomposing oil price changes into positive and negative partial sums, this model estimates short- and long-run asymmetric responses and traces adjustment paths using dynamic multipliers. Our results indicate a stable cointegrating relationship and pronounced asymmetry: a $1 increase in oil prices raises the trade balance by approximately $1.56 billion in the long run, whereas a $1 decrease reduces it by about $1.85 billion. The dynamic multipliers show substantial immediate effects, approximately +$2.76 and −$2.88 at horizon 0, which gradually converge to their respective long-run levels, with negative shocks producing larger and more persistent adverse effects than positive shocks. These findings emphasize KSA’s external vulnerability to oil price declines and underscore the need for countercyclical fiscal rules, reserve buffers, and accelerated non-oil export growth to mitigate downside risks and effectively manage external trade in response to global oil market volatility. Full article

The COVID-19 pandemic generated unprecedented disruptions to the global tourism industry, severely affecting tourism-dependent economies and related employment. India, as one of the world’s major tourist destinations, experienced substantial declines in tourist arrivals during the pandemic period. This study investigates the effects of COVID-19-induced fear on tourism demand and economic performance in India using the COVID-19 Fear Index, which captures behavioural responses to pandemic-related uncertainty beyond conventional indicators such as infection rates, mortality, and lockdown restrictions. The COVID-19 Fear Index is constructed using reported COVID-19 cases and mortality data sourced from the European Centre for Disease Prevention and Control and the Johns Hopkins Coronavirus Resource Centre. Monthly data from January 2020 to October 2023 are analysed using autoregressive distributed lag (ARDL) and nonlinear autoregressive distributed lag (NARDL) models to examine both tourism demand dynamics and the asymmetric tourism–growth relationship. The results confirm a stable long-run cointegration relationship among tourism demand, the COVID-19 Fear Index, exchange rate, and ICT development. Pandemic-induced fear significantly reduces tourism demand in the long run ($-0.152$, $p=0.021$) and short run ($-0.084$, $p=0.000$), indicating that heightened uncertainty suppresses tourist arrivals. Exchange rate depreciation also negatively affects tourism demand ($-0.267$, $p=0.000$), whereas ICT development positively enhances tourism resilience ($0.463$, $p=0.000$). The error correction term ($-0.436$, $p=0.000$) confirms rapid adjustment toward long-run equilibrium. Furthermore, the nonlinear analysis reveals asymmetric effects, where positive tourism shocks increase economic growth by $0.088\%$ ($p=0.003$), while negative shocks exert a stronger contractionary effect ($0.409$, $p=0.000$). These findings highlight the vulnerability of tourism-dependent economies to uncertainty shocks and emphasise the importance of ICT-driven resilience strategies, adaptive tourism policies, and crisis-responsive economic planning. Full article

This study investigates whether government spending stimulates economic growth by applying the Keynesian theoretical framework across varying economic conditions. The analysis uses annual data from 1980 to 2024 to explore how fiscal dynamics change over time and across regimes. It employs the NARDL model to evaluate asymmetric effects, the STAR model to capture regime dependence, and threshold Granger causality tests to assess causal relationships across spending regimes. These approaches enable a detailed examination of asymmetry, structural breaks, and nonlinear adjustment in the spending–growth relationship. The results show that Keynesian effects remain present across economic regimes but operate only in the short run without generating sustained long-term output gains. The absence of long-run cointegration is consistent with the presence of short-run dynamic multipliers, because these multipliers reflect temporary adjustments rather than permanent effects. The findings indicate that increases and decreases in government spending have proportionate effects on output, confirming a symmetrical Keynesian response. Government debt demonstrates a consistently negative and statistically robust influence on short-run growth. Corruption, measured using an index capturing governance quality, heightens policy ineffectiveness during periods of high public expenditure. Threshold causality tests reveal that government spending Granger causes economic growth in both low and high spending regimes, confirming the short-run stimulative potential of fiscal policy. Consequently, the study supports countercyclical fiscal interventions while emphasising the importance of prudent debt management and governance reforms to reduce fiscal risks. Full article

This study examines the asymmetric and distribution-dependent effects of economic growth, renewable energy consumption, energy use, trade openness, and innovation on CO₂ emissions in France over the period 1990–2024. It aims to understand how positive and negative shocks in key macroeconomic variables shape emissions dynamics within a mature low-carbon economy and their implications for environmental sustainability and sustainable energy transition. The analysis employs a nonlinear autoregressive distributed lag (NARDL) model to capture short- and long-run asymmetries, combined with the bounds testing approach for cointegration and Newey–West corrections for robust inference. To account for distributional heterogeneity, simultaneous quantile regressions (Q25, Q50, Q75) are estimated. The results reveal significant nonlinearities and state-dependent effects. Reductions in renewable energy exert stronger upward pressures on emissions than the mitigating effects of increases, highlighting a loss-dominance asymmetry. Energy use and trade openness exhibit asymmetric and persistent emission-increasing effects, while innovation reduces emissions primarily in the short run and during high-emission regimes. Economic growth shows no significant long-run impact, suggesting partial decoupling. Overall, emissions responses vary across both time and conditional distribution. The findings indicate that climate policies in France should prioritize renewable energy stability, energy-system flexibility, and targeted innovation strategies to effectively manage asymmetric and state-dependent environmental dynamics. The study further demonstrates that achieving long-run sustainability objectives requires adaptive climate policies capable of addressing nonlinear and distribution-dependent emissions responses within France’s low-carbon economic structure. Full article

This paper estimates an extended Cobb–Douglas production function for five major economies (China, the EU, India, the Russian Federation, and the USA) over the period of 1990–2023, incorporating electricity production from renewable, non-renewable, and nuclear sources as discrete production inputs. To capture complex properties in time series, a comprehensive econometric strategy is adopted, which combines linearity tests, multiple detection of structural changes, linear and nonlinear unit root tests, autoregressive distributed lag (ARDL) bounds testing for cointegration, error correction modelling, and error correction model (ECM)-based Granger causality. The results confirm the presence of mixed orders of integration, nonlinear dynamics, and structural instability across countries, justifying the use of the ARDL framework. The bounds test reveals a long-run cointegrating relationship between output, capital, labour, and energy inputs in all five economies. Long-run elasticities differ significantly across countries, highlighting strong structural heterogeneity. The short-term dynamics show that energy shocks have asymmetric and country-specific effects on output, while the error correction terms confirm convergence towards the long-run equilibrium, with the fastest adjustment observed in the EU and the slowest in the US. The causality results support the hypothesis of growth-led energy in China, India and the Russian Federation, while two-way feedback is observed in the EU and the US. These findings suggest that energy policy cannot be uniform across countries and must be aligned with domestic production structures, technological intensity, and energy transition stages. Full article

This study investigates the structural relationship between inflation and key macroeconomic fundamentals in Türkiye, an emerging economy characterized by persistently high and divergent inflation dynamics. Using monthly data for the 2011–2024 period, we apply the Kapetanios, Shin, and Snell (KSS) nonlinear cointegration framework, which captures asymmetric adjustment dynamics that standard linear models fail to detect. The aggregate model reveals no long-run cointegration between inflation and monetary and fiscal fundamentals, indicating that conventional transmission channels have weakened and inflation has become decoupled from its traditional determinants. Pairwise analyses show that this decoupling is not complete; rather, the relationship persists in a fragmented, nonlinear, and variable-specific manner. Short-run Granger causality tests further reveal that only fiscal expansion and real money supply retain explanatory power over inflation, while the policy rate proves ineffective. Collectively, these findings indicate that inflation in Türkiye has increasingly evolved into an endogenous and self-reinforcing process, shaped more by policy incoherence than by any single macroeconomic driver. Restoring a coordinated, rule-based monetary and fiscal policy framework emerges as a necessary condition for re-establishing the link between inflation and macroeconomic fundamentals and ensuring durable price stability. Full article

This study examines the dynamic transmission of international rubber prices along the SHFE–FOB Bangkok–local farm-gate chain in Thailand using weekly data and an integrated econometric–machine-learning framework. Engle–Granger cointegration tests reveal a stable long-run equilibrium in which domestic prices are tightly anchored to FOB export quotations and the exchange rate, while SHFE futures function primarily as an upstream information benchmark and exert no direct long-run influence once the export-pricing channel is accounted for. A two-step error-correction model shows that approximately 13% of deviations from long-run parity are corrected each week, indicating gradual yet systematic convergence toward export-parity pricing. Short-run dynamics are dominated by contemporaneous changes in FOB prices, with only modest spillovers from SHFE and no statistically meaningful contribution from exchange-rate fluctuations at the weekly frequency. The asymmetric ECM indicates a pronounced upward-biased response: positive FOB shocks transmit strongly to domestic prices (θ⁺ ≈ 1.074), whereas negative shocks have only a limited impact (θ⁻ ≈ 0.067). This pattern is consistent with asymmetric adjustment along the supply chain, where export-price increases are passed through more rapidly than decreases. An ECM-constrained gradient boosting model is employed to assess potential nonlinearities but does not outperform the linear ECM, suggesting that once long-run equilibrium conditions are imposed, short-run price adjustment remains predominantly linear. Taken together, these findings underscore the central role of export pricing in Thailand’s rubber market and point to the importance of policy instruments that enhance price transparency, strengthen export-linked risk management, and improve resilience to international price shocks. Full article

We investigate the sustainability of the asymmetric public social spending (PSS)–financialization relationship in the Eurozone over the period of 1995q1–2023q4. We follow the theoretical endogenous nexus of PSS with the financial fragility hypothesis (FFH) and finance-led growth regime; the nonlinear autoregressive distributed lag (NARDL) model and cointegration are applied for this purpose. The analysis suggests the following: (1) The selected determinants of the three stages of the FFH affect dependent PSS asymmetrically in the long run (as well as in the short run, sometimes); meanwhile, more often than not, significantly larger effects tended to be negative changes. (2) The asymmetric shocks of explanatories gently increase PSS in many cases but also decrease it strongly in others. (3) The “automatic stabilizer” role of PSS is proven, whereas the contrary is not rejected; that is, PSS was also used as a “counter-automatic stabilizer” tool. (4) This leads to “ratchet effects”; the direction of these effects is unclear, but it seems to decline over time. (5) The financialization of the PSS phenomenon is revealed and discussed using relevant economic interpretations for certain determinants, such as credits to nonfinancial corporations, relative profitability, domestic borrowing from abroad, and the snowball effect; all of these have long-term effects on PSS, comprising negative changes, with asymmetric dynamics towards a new equilibrium at a horizon of between 4 and 16 quarters. Policy implications are related to the sustainability of PSS through the control of the economy’s financialization. We contribute to the literature by analyzing—for the first time as far as we know—the endogenous nonlinear long- and short-run dynamics of PSS based on a comprehensive model of the FFH and the finance-led growth regime. Full article

This paper’s objective is to examine the asymmetric cointegration and asymmetric effects of financial development and monetary policy on monetary transmission mechanisms in the Nigerian context using annual data spanning the period from 1986 to 2023. This study pushes the frontiers of knowledge by providing information on the nonlinear impacts of monetary policy and financial sector innovations on monetary transmission mechanisms in Nigeria to help policymakers tailor their strategies to local conditions, enhancing the effectiveness of monetary interventions in the economy. To achieve this, this paper adopted nonlinear ARDL models to understand how changes in the direction of monetary policy and developments in the financial system induce changes in the transmission of monetary policy. The findings document the existence of asymmetries in both the short and long run, revealing that the impacts of financial development and monetary policy on the different monetary policy channels are not uniform. These asymmetries indicate that the responses of various economic variables to monetary policy actions differ depending on the level of financial development. These findings underscore the complexity of the monetary transmission mechanism and the necessity for a nuanced understanding of how financial development and monetary policy interact in different contexts. Consequently, this finding is symptomatic of some characteristics of those financial markets on their way toward advanced developments. As the financial system matures, monetary policy may have a greater impact on the cost of short-term funding for banks without having any discernible effect on the rates at which businesses and households access funding. Therefore, this paper recommends focusing on the policies that will foster the financial system across the banking sector, capital market, bond market, and overall financial sector to improve the efficiency of the monetary transmission process. Full article

The increase in global economic policy uncertainty (EPU), volatility or stock market uncertainty (VIX), and geopolitical risk (GPR) has affected gold prices (GD), crude oil prices (WTI), and stock markets, which present challenges for investors. Sustainable stock investments in emerging markets may minimize and diversify investor risk. We applied the non-linear autoregressive distributed lag (NARDL) model to examine the effects of EPU, VIX, GPR, GD, and WTI on sustainable stocks in seven emerging markets (Thailand, Malaysia, Indonesia, Brazil, South Africa, Taiwan, and South Korea) from January 2012 to June 2023. EPU, VIX, GPR, GD, and WTI showed non-linear cointegration with sustainable stocks in seven emerging markets and possessed different asymmetric effects in the short and long run. Change in EPU increases the return of Thailand’s sustainable stock in the long run. The long-run GPR only affects the return of Indonesian sustainable stock. All sustainable stocks are negatively affected by the VIX and positively affected by GD in the short and long run. Additionally, long-run WTI negatively affects the return of Indonesia’s sustainable stocks. Our findings contribute to rational investment decisions on sustainable stocks, including gold and crude oil prices, to hedge the asymmetric effect of uncertainty. Full article

This study investigates the asymmetric effects of economic policy uncertainty (EPU) on food security in Nigeria, utilizing annual time series data from 1970 to 2021. The study used descriptive statistics, unit root tests, the nonlinear autoregressive distributed lag (NARDL) model and its associated Bounds tests to analyze the data. The analysis reveals that adult population, environmental degradation, exchange rate uncertainty (EXRU), financial deepening, food security (FS), government expenditure in agriculture uncertainty (GEAU), inflation, and interest rate uncertainty (INRU) exhibit positive mean values over the period, with varying degrees of volatility. Cointegration tests indicate a long-term relationship between EPU variables (GEAU, INRU, and EXRU) and food security. The study finds that cumulative positive and negative EPU variables have significant effects on food security in the short run. Specifically, negative GEAU, positive INRU, positive and negative EXRU have significant effects in the short run. In the long run, negative GEAU, positive and negative EXRU have significant effects on food security. Additionally, the research highlights asymmetric effects, showing that the influence of GEAU and EXRU on food security differs in the short- and long-run. The study underscores the importance of increased government expenditure on agriculture, control of exchange rate and interest rate uncertainty, and the reduction in economic policy uncertainty to mitigate risks in the agricultural sector and enhance food security. Recommendations include strategies to stabilize exchange rates to safeguard food supply and overall food security. Full article