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on Financial Development and Growth |
| By: | Adenutsi, Deodat E. |
| Abstract: | Purpose: This paper seeks to provide further insights into understanding the finance-growth nexus by verifying the hypothesis that financial development promotes economic growth through its capacity to attract increased international migrant remittances to Ghana. Design/Methodology/Approach: A dynamic equilibrium-correction mechanism model for the period 1987(3)-2007(4) was estimated following the Johansen cointegration procedure. This approach produced maximum likelihood estimators of the unconstrained cointegrating vector, and suggested the number of cointegrating vectors without relying on an arbitrary normalization. Findings: The findings reveal two stylized facts with reference to Ghana. First, although financial development Granger-causes international migrant remittance inflows, it is in itself directly detrimental to endogenous growth. Second, international migrant remittance inflows are statistically significant in explaining variations in endogenous growth in the short run as well as in the long run. Practical Implications: Since directly, financial development hampers endogenous growth, but Granger-causes increased inflows of migrant remittances, and these remittances impact positively but marginally on endogenous growth, it follows that the sequencing of implementing Ghana’s financial reform programmes should be re-examined, whilst an enabling environment is created to induce Ghanaians living abroad to remit home through official channels. Originality/Value: International migrant remittances were found to be statistically significant in promoting endogenous growth, albeit marginally. Financial development does not directly engender growth, unless it succeeds in attracting non-debt foreign capital in the form of remittances through the formal sector. Financial development causes migrant remittance inflows which impact positively on growth. |
| Keywords: | Financial Development; Economic Growth; International Migrant Remittances; Ghana |
| JEL: | F3 O16 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29330&r=fdg |
| By: | Shahbaz, Muhammad; Shabbir, Shahbaz Muhammad; Butt, Muhammad Sabihuddin |
| Abstract: | This paper explores the effect of military expenditures on external debt in case of Pakistan over the period of 1973-2009. For this purpose, ARDL bounds testing approach is used to examine cointegration between the variables. ADF, P-P and ADF-GLS, Clemente et al. (1998) unit root tests are applied to check the order of integration of variables. OLS and ECM regressions approaches are employed to investigate marginal impact of military spending on external debt in long and short run. Our findings indicate cointegration which confirms long run relationship between military expenditures, external debt, economic growth and investment. The results reveal that a rise in military expenditures increases the stock of external debt. The inverse effect of economic growth on external debt is found and an increase in investment is also increasing external debt in the country. This study invites policy makers to approach the problem of curtailing external debt in innovative ways in case of Pakistan. |
| Keywords: | Military Spending; External Debt; Cointegration |
| JEL: | A10 |
| Date: | 2011–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30429&r=fdg |
| By: | Das, Kumar B |
| Abstract: | This paper highlights the global economic prosperity and portrays the anatomy of poverty in developing countries. It analyses the incidence of rural and urban poverty persisting in fourteen countries including India. It address the contradiction of coexistence of poverty and hyper economic growth in the globe. It is found that the growth elasticity of poverty is very low in developing countries. It argues that economic growth process can be inclusive and sustainable only by curbing the process of marginalization, corruption and exploitation |
| Keywords: | growth Elasticity; Poverty ;Asia; Europe |
| JEL: | A10 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30457&r=fdg |
| By: | Luckstead, Jeff; Choi, Seung Mo; Devadoss, Stephen; Mittelhammer, Ron C. |
| Keywords: | China, IST, human capital, International Development, o30, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103072&r=fdg |
| By: | Honkapohja , Seppo (Bank of Finland); Turunen, Arja H (University of New Orleans. Department of Economics and Finance); Woodland, Alan D (University of New South Wales) |
| Abstract: | We study a many-country endogenous growth model in which decisions about innovation and new investment are influenced by growth expectations. Adaptive learning dynamics determine the country-specific short-run transition paths. The countries differ in basic structural parameters and may impose tariffs on imports of capital goods. Numerical experiments illustrate the adjustment dynamics that follow the use of tariffs. We show that countries that limit trade in capital goods can experience dynamic gains both in growth and in utility and that such gains persist longer the larger the structural advantages of the region that applies tariffs. Substantial differences in levels of innovation, consumption, output and utility can appear, and asymmetries in economic outcomes that were present before trade restrictions are made more severe. |
| Keywords: | endogenous growth; expectations; learning; short-run dynamics; tariffs; complementary capital goods |
| JEL: | F15 F43 |
| Date: | 2011–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2011_009&r=fdg |
| By: | Mikkel Nørlem Hermansen (School of Economics and Management, Aarhus University, Denmark) |
| Abstract: | Longevity has been increasing in the developed countries for almost two centuries and further increases are expected in the future. In the neoclassical growth models the case of population growth driven by fertility is well-known, whereas the properties of population growth caused by persistently declining mortality rates have received little attention. Furthermore, the economic literature on the consequences of changing longevity has relied almost entirely on analysis applying a once and for all change in the survival probability. This paper raises concern about such an approach of comparison of steady state equilibrium when considering the empirically observed trend in longevity. We extend a standard continuous time overlapping generations model by a longevity trend and are thereby able to study the properties of mortality-driven population growth. This turns out to be exceedingly complicated to handle, and it is shown that in general no steady state equilibrium exists. Consequently analytical results and long run implications cannot be obtained in a setting with a realistic demographic setup. |
| Keywords: | Longevity, Population growth, Overlapping generations models, Steady state equilibrium, Existence |
| JEL: | J11 C62 O41 E13 |
| Date: | 2011–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2011-04&r=fdg |