Search Results (16)

This study examined South Africa’s economic growth rate from 1980 to 2022 through an econometric analysis of fiscal and monetary policies. The study sought to investigate the relationships between the economy’s growth rate and various fiscal and monetary policy variables, taking into account different economic approaches such as Keynesian, monetarist, and Wagner’s perspectives. The methodology used consisted of data preparation, multiple unit root tests, Autoregressive Distributed Lag (ARDL) cointegration analysis, diagnostic tests, and pairwise Granger causality analysis. The empirical analysis found a long-term cointegration among the economic growth rate, government debt, expenditure, and revenue in fiscal policy, though government debt and expenditure were not statistically significant. Contrary to economic theory, increased government revenue had a negative correlation with economic growth. There was no long-term relationship found between the economic growth rate and monetary policy variables such as the official exchange rate, inflation rate, real interest rates, and M3 money supply. Pairwise Granger causality tests revealed a one-way relationship between government spending and economic growth, providing support to the Keynesian approach to fiscal policy. This study also discovered evidence that economic growth Granger-causes inflation, implying that economic growth may have predictive power for inflation, consistent with the demand-pull inflation hypothesis. However, no direct predictive relationships were found between the selected monetary policy variables and economic growth, supporting the long-run theory of monetary neutrality. This study suggests evaluating spending, managing inflation, implementing reforms, closing infrastructure gaps, encouraging investment, and ensuring fiscal sustainability. Full article

The performance of technology companies listed on NASDAQ significantly impacts larger economic trends. Investors need specific information to navigate market volatility and make informed decisions in an increasingly complex marketplace. Furthermore, amidst the ongoing digital revolution, legislators and regulatory agencies must comprehend the operational dynamics of technology companies to develop frameworks that support innovation while maintaining market stability. Our study assesses the impact on the overall operational efficiency of NASDAQ-listed firms from 2011 to 2023, resulting from the interdependence of critical variables such as selling, general, and administrative expenses (SGA), cost of goods and services sold (COGS), and investments in research and development (R&D). Johansen’s cointegration methodology and pairwise Granger causality tests were employed to unveil long-term relationships, equilibrium adjustments, and causal relationships among the considered variables. The results provide critical insights into the strategic management of operational variables by the listed companies. The economic significance of the results obtained underscores the paramount importance of efficiently managing the cost of goods and services sold to achieve superior operating performance among these leading technology firms. Full article

This study uses time series data from the World Bank database to examine the relationship between unemployment and entrepreneurship in Namibia. We applied the Augmented Dickey–Fuller and Phillips–Perron tests for unit root testing and found all the variables to be stationary after the first difference. Given that, we employed the Johansen–Juselius test to measure cointegration, which revealed the absence of long-run relationships between the variables. Hence, we performed a Vector Autoregressive model to estimate the short-run relationships and found that Namibia exhibits both the refugee and Schumpeter effects. Finally, we measured the direction of causality using the Pairwise Granger causality test, and the results revealed that none of the variables Granger causes the other, implying that they are all independent of each other. This implies that the significance of entrepreneurship in addressing unemployment in Namibia is limited in the long run, mostly owing to the absence of sustainable business ventures. Therefore, we recommend prioritizing the development of policies to tackle unemployment through sustainable entrepreneurship. Full article

The current study aims to examine the determinants of the capital adequacy ratio (CAR) in the context of Jordanian banks through a literature review and analysis of empirical evidence. The aggregate data were obtained from Globaleconomy.com, the Financial Soundness Indicators, the Central Bank of Jordan, and World Bank Data covering the period from 2003 to 2021. The aggregate data were analyzed using autoregressive distributed lag (ARDL), utilizing Econometric Views (EViews) software. The empirical results suggest a short-run causality relationship running from banks’ credit-to-deposits ratio, banks’ leverage ratio, banks’ liquidity ratio, and one-year-lagged ROE to the CAR. The results also suggest the existence of short-run causality running from the capital-to-assets ratio, one-year-lagged capital-to-asset ratio, liquid-assets-to-deposits ratio, and coverage ratio to CAR. In addition, the results show the leverage ratio and liquidity ratio as having positive long-run associations with CAR. A positive and significant long-run association was also found between CAR, on the one hand, and the capital-to-assets ratio and the liquid assets to deposits ratio; the coverage ratio, on the other hand, showed a negative and statistically significant long-run association with CAR. The pairwise Granger causality test results reveal that liquid asset to deposits, money supply, profitability, and the capital-to-assets ratio Granger cause CAR. The study findings emphasize the importance of understanding the factors impacting CAR, the direction of the influence, the magnitude of the influence of the determinants of CAR in emerging economies such as Jordan and taking appropriate measures to safeguard the stability and resilience of the banking industry. Full article

Purpose: The purpose of this study is to test the validity of the quantity theory of money (QTM) on South African sectoral data. The rationale of this study and its necessity for South Africa as the case study is that, although aggregate inflation may lie within the target range, inflation at a sectoral level, particularly in the food and transport sector, is still a matter of concern in South Africa. Methodology/approach: This study employed the Non-linear Autoregressive Distributed Lagged model (NARDL) to assess potential asymmetries in the effect of money supply to differentiate between the effects of contractional and expansional episodes on inflation at the sectoral level. Quarterly time series data spanning from 2002Q2 to 2021Q2 was utilised for the estimation. Ultimately, the causal effect amongst the variables is examined by employing the Pairwise Granger Causality test. Findings: The results suggest that in the short run, the effect of monetary policy shocks is very weak. On the other hand, in the long run, both negative and positive shocks in the money supply push inflation at the sectoral level in the opposite directions, and positive shocks (expansionary monetary policy) have a greater effect than negative shocks, which renders the QTM invalid in South Africa. The sectoral response was found to be heterogeneous in the long run, and this was also backed by the results of the Granger Causality test and the dynamic multipliers. Asymmetry in the effect of the money supply is assessed in some of the sectors only in the long run. Practical implications: Based on the results, this study confirms great discrepancies in sectoral responses. Therefore, aggregate inflation may not be a good indicator of the inflation path in South Africa, as it may underestimate sectoral variations. Originality/value: The originality of this study lies on testing the validity of the QTM on inflation at the sectoral level in the South African context using a non-linear approach to assess potential asymmetry between the effects of expansionary and contractionary episodes of monetary policy shocks. Full article

Wagner Law and Keynesian approaches are the two fundamental theories of public finance. The aim of this study is to assess empirical evidence for the public spending–national income relationship at a disaggregated level for the time period 1995–2019. The sectoral public expenditures include education, health, and defense. The data employed were derived by EUROSTAT and OECD. Based on our findings, a sole relationship of the variables was validated, while the causality of the relationship provides conflict results depending on whether two-variate or multivariate methodology is employed. In the case of the multivariate framework that outperforms the two-variate approach in terms of information, the causality is directed from government expenses to the GDP level, validating the Keynesian approach in the long run as well as in the short run. On the other hand, the results validate Wagner Law based on the results of Granger causality pairwise test. A potential interpreatation for the results found is related to the measures imposed by the Memorandum, since the disproportionate cuts of the public expenses in the period of crisis have determined the evolution of national income. The scientific value of the presents study stands on the suggestion of potential effective measures aiming at the limitation of national income shrinkage in periods of severe economic crises worldwide. Full article

Implementing public policies linked to sustainable development is a global challenge for most countries that focused their efforts on identifying and improving the factors that led to environment degradation. The current paper analyzes the influence of primary indicators of public finances (public debt and budget deficit) on renewable-energy consumption (REN), for the emerging economies within the European Union. The main objective of this research is to understand the implications of fiscal measures on the sustainable development of a country and thus provide directions for stimulating renewable-energy consumption. The research starts with cross-sectional dependence analysis by using the Breusch–Pagan Lagrange multiplier (LM) test that is followed by cointegration relationships among variables by applying two appropriate panel-cointegration tests (Pedroni and Johansen). The research methodology is based on the fully modified ordinary-least-squares (FMOLS) method in order to test the long-run relationships, and on the pairwise Granger causality test in order to identify the direction of causality among variables. Results show unilateral influences from public debt and budget deficit on the analyzed variables, especially on renewable-energy consumption, and a bidirectional causality relationship between budget deficit and trade openness. Full article

In spite of the development of the Prognostics and Health Management (PHM) during past decades, the reliability prognostics of engineered systems under time-varying external conditions still remains a challenge in such a field. When considering the challenge mentioned above, a hybrid method for predicting the reliability index and the Remaining Useful Life (RUL) of engineered systems under time-varying external conditions is proposed in this paper. The proposed method is competent in reflecting the influence of time-varying external conditions on the degradation behaviour of engineered systems. Based on a subset of the Commercial Modular Aero-Propulsion System Simulation (C-MAPSS) dataset as case studies, the Cox Proportional Hazards Model (Cox PHM) with time-varying covariates is utilised to generate the reliability indices of individual turbofan units. Afterwards, a Vector Autoregressive model with Exogenous variables (VARX) combined with pairwise Conditional Granger Causality (CGC) tests for sensor selections is defined to model the time-varying influence of sensor signals on the reliability indices of different units that have been previously generated by the Cox PHM with time-varying covariates. During the reliability prediction, the Fourier Grey Model (FGM) is employed with the time series models for long-term forecasting of the external conditions. The results show that the method that is proposed in this paper is competent for the RUL prediction as compared with baseline approaches. Full article

This research tests the consequences of Nigeria’s indirect taxes on consumption. There are two reasons why the government imposes taxes on goods and services in Nigeria. The primary purpose is to produce income for the smooth running of the administration. Another silent reason is to discourage the ingestion of prohibited products and services, and that is through customs and excise duties (CED). This study assesses both Value Added Tax (VAT) and CED to determine their effects on consumption using various econometric tools, such as trend analysis, pairwise Granger causality tests, unrestricted co-integration rank test, least squares technique, and data that cover the period from 2005 to 2019. The results indicate that VAT insignificantly but positively influences consumption, while CED has a considerable auspicious influence on use. This result shows that VAT imposition on merchandises and services is discouraging the absorption of specific foodstuffs and services and allowing the operation of informal economic activities to thrive in Nigeria. However, CED charges do not reduce the use of certain illegal products purposely taxed to discourage their consumption. This study recommends a reduction in the prices of food items and services to enable consumers to increase their patronage, while the products that attract CED but are harmful should be banned entirely. Thus, offenders should be allowed to face the wrath of the law. Full article

The aim and novelty of this study consist of estimating the nexus between CO₂ (carbon dioxide) emissions, energy use, economic growth, and financial development for ten Central and Eastern European countries (CEEC) over the 2000–2017 period, starting from Environmental Kuznets Curve (EKC) theory. The Fully Modified Ordinary Least Squares (FMOLS) method was used for testing the cointegration relationship. Granger causality estimation based on the Vector Error Correction Model (VECM) and Pairwise Granger causality test were applied to identify the causality relationships between the variables and to identify the direction of causality. The implementation of the tests led to significant conclusions. In the long run, the levels of CO₂ emissions and energy use do not have any influence on economic growth. Furthermore, there is a bidirectional causality among economic growth in terms of GDP and financial development variables. Thus, increasing financial development will generate more CO₂ emissions and more energy use, and increasing economic growth will lead to rising financial development. In the short run, increasing financial development will generate more CO₂ emissions and will lead to increased energy use and economic growth. Also, a bidirectional causality is being revealed between financial development and CO₂ emissions. This indicates that financial development may help to reduce CO₂ emissions. Full article

One of the European Union’s (EU) objectives regarding climate change is a 40% reduction in greenhouse gas emissions by 2030, ensuring that member states focus on sustainable development. The aim of this study was the comparison of a three-dimensional relationship between green taxation, environmental performance and economic growth for the time period between 1995 and 2017 in Romania and Sweden. The novelty consists of simultaneously using the double dividend theory and environmental Kuznets curve theory for Romania. The autoregressive distributed lag (ARDL) method was used for testing the cointegration relationship. The Granger causality estimation based on the ARDL-error correction model was applied to identify the causality relationship between the variables and the pairwise Granger causality test to detect the direction of causality. The implementation of the tests led to the conclusion that environmental taxes will have a significant influence on the reduction of greenhouse gas emissions in the long run in both Romania and Sweden, while in the short run, no such influence will be noticed. Also, in Romania, in the long term, there was a bidirectional causality relationship between economic growth and greenhouse gas emissions, while in Sweden, the causality relationship was from economic growth to greenhouse gas emissions. Full article

Sovereign credit default swap (CDS) spreads exhibit strong co-movements across Asian countries and regions, including both emerging and developed economies. After controlling for global impacts, we examine the regional lead-lag relationships among changes in ten Asian sovereign CDS spreads. We use the pairwise Granger causality test to find that lagged changes in Kazakhstan’s sovereign CDS spreads significantly predict changes in other Asian sovereign CDS spreads. By estimating the news-diffusion model, we find evidence that this predictive relationship may be explained by information diffusion. Furthermore, we find that lagged changes in Kazakhstan’s CDS spreads have significant out-of-sample predictive power for other Asian economies, providing practical implications for sustainable investments and risk management. Full article

This study aims to explore the casual relationship between agricultural production, economic growth and carbon dioxide emissions in Pakistan. An autoregressive distributed lag (ARDL) model is applied to examine the relationship between agricultural production, economic growth and carbon dioxide emissions using time series data from 1960 to 2014. The Augmented Dickey–Fuller (ADF), Phillips–Perron (PP) and Kwiatkowski–Phillips–Schmidt–Shin (KPSS) tests are used to check the stationarity of variables. The results show both short-run and long-run relationships between agricultural production, gross domestic product (GDP) and carbon dioxide emissions in Pakistan. From the short-run estimates, it is found that a 1% increase in barley and sorghum production will decrease carbon dioxide emissions by 3% and 4%, respectively. The pairwise Granger causality test shows unidirectional causality of cotton, milled rice, and sorghum production with carbon dioxide emissions. Due to the aforementioned cause, it is essential to manage the effects of carbon dioxide emissions on agricultural production. Appropriate steps are needed to develop agricultural adaptation policies, improve irrigation facilities and introduce high-yielding and disease-resistant varieties of crops to ensure food security in the country. Full article

The present study attempts to explore the correlation between carbon dioxide emissions (CO₂ e), gross domestic product (GDP), land under cereal crops (LCC) and agriculture value-added (AVA) in Pakistan. The study exploits time-series data from 1961 to 2014 and further applies descriptive statistical analysis, unit root test, Johansen co-integration test, autoregressive distributed lag (ARDL) model and pairwise Granger causality test. The study employes augmented Dickey–Fuller (ADF) and Phillips–Perron (PP) tests to check the stationarity of the variables. The results of the analysis reveal that there is both short- and long-run association between agricultural production, economic growth and carbon dioxide emissions in the country. The long-run results estimate that there is a positive and insignificant association between carbon dioxide emissions, land under cereal crops, and agriculture value-added. The results of the short-run analysis point out that there is a negative and statistically insignificant association between carbon dioxide emissions and gross domestic product. It is very important for the Government of Pakistan’s policymakers to build up agricultural policies, strategies and planning in order to reduce carbon dioxide emissions. Consequently, the country should promote environmentally friendly agricultural practices in order to strengthen its efforts to achieve sustainable agriculture. Full article

No consensus has been reached on the problem of solving resource depletion. A recognition of the fact that resources are not endless and the Earth is a finite globe reinforces the idea that the vision of continuous economic growth is not sustainable over time. The aim of this paper is to examine the efficacy of real prices as an indicator of metals and oil in consideration of growth tendencies in the Consumer Price Indexes. In addition, enhancing the current literature on commodity price interrelationships, the main contribution of this study is the substitution of different proxies in order to justify the effect of scarcity and crude oil changes on the examined metal group prices. In order to demonstrate the usefulness of scarcity as an indicator of real price deviations, the study has been conducted involving various non-renewable metals, i.e., copper, molybdenum, zinc, gold and platinum group metals. The real price indices and metal prices of the US market are constructed between 1913 and 2015. Moreover, additional econometric analyses are also carried out to discover whether prices of various metals associate with oil prices and scarcity, as the proxy of reserves-to-production ratio. The linear regression results seem to suggest that the effects of the R/P ratios are negatively correlated with each of the examined precious (gold, PGMs), mass consumable (copper, zinc) and doping agent (molybdenum) metals from 1991 to 2015. An increase in oil-prices is positively associated with the price levels of each non-renewable resource in the short-run. The findings of multivariate co-integration and Granger causality tests also suggest that pairwise and direct relationships among these variables seem to arise in the long-run. These findings indicate essential questions that must be addressed by future generations in order to appropriately solve scarcity problems. Full article