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on Financial Development and Growth |
| By: | Shahbaz, Muhammad; Mohammad, Mafizur Rahman |
| Abstract: | This paper explores the relationship between exports, financial development and economic growth in case of Pakistan. In doing so, the autoregressive distributed lag (ARDL) bounds testing approach to cointegration and error correction model are applied to test the long run and short run relationships, respectively. The direction of causality between the variables is investigated by the vector error correction model (VECM) Granger causality test and robustness of causality analysis is tested by applying innovative accounting approach (IAA). The analysis confirms cointegration for the long run relation between exports, economic growth and financial development in case of Pakistan. The results indicate that economic growth and financial development spur exports growth in Pakistan. The causality analysis reveals feedback hypothesis that exists between financial development and economic growth, financial development and exports, and, exports and economic growth. This study provides new insights for policy makers to sustain exports growth by stimulating economic growth and developing financial sector in Pakistan. |
| Keywords: | Exports, Financial Development, Economic Growth, Cointegration |
| JEL: | F14 |
| Date: | 2014–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:53225&r=fdg |
| By: | Noritaka Maebayashi (Graduate School of Economics, Osaka University); Takeo Hori (College of Economics, Aoyama Gakuin University); Koichi Futagami (Graduate School of Economics, Osaka University) |
| Abstract: | We construct an endogenous growth model with productive public capital and government debt, in which government debt is gradually adjusted to the target level. We examine how the governmentfs debt reductions affect the transitional dynamics and welfare of the economy. We show that fiscal consolidation has contractionary ef- fects on the economy in the short run, but has positive long-run effects on the growth of key macroeconomic variables. Fiscal consolidation based only on expenditure cuts improves social welfare and attains larger welfare gains than consolidation that com- bines a tax increase with expenditure cuts. Importantly, under fiscal consolidation based only on expenditure cuts, as the size and speed of the debt reduction increase, welfare improves even further. |
| Keywords: | Fiscal consolidation; Debt policy rule; Public capital; Welfare; Endogenous growth |
| JEL: | E62 H54 H63 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1208r2&r=fdg |
| By: | Shahbaz, Muhammad; Sbia, Rashid; HAMDI, Helmi; Ur Rehman, Ijaz |
| Abstract: | This paper investigates relationship between information communication technology (ICT), economic growth and electricity consumption using data of UAE over the period of 1975-2011.We have tested the unit properties of variables and the Bayer and Hanck combined cointegration approach for long run relationship. The innovative accounting approach is applied to test the robustness of the VECM Granger causality findings. Our empirical results confirm the existence of cointegration between the series. We find that ICT adds in electricity demand but electricity prices lower it. Income growth increases electricity consumption. The non-linear relationship between ICT and electricity consumption is an Inverted U-shaped. The causality results reveal that ICT and electricity prices Granger cause electricity demand. The feedback effect exists between economic growth and electricity consumption |
| Keywords: | ICT, Growth, Electricity, UAE |
| JEL: | O3 |
| Date: | 2014–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:53226&r=fdg |