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on Financial Development and Growth |
| By: | Jawaid, Syed Tehseen; Raza, Syed Ali |
| Abstract: | This study investigates the relationship between workers’ remittances and economic growth in China and Korea by employing time series data from period of 1980 to 2009. Cointegration results confirm that there exist significant positive long run relationship between remittances and economic growth in Korea, while, significant negative relationship exist between remittances and economic growth in China. Error correction model confirms the significant positive short run relationship of workers’ remittances with economic growth in Korea while, the results of China were insignificant in short run. Causality analysis confirms unidirectional causality runs from workers’ remittances to economic growth in both China and Korea. Sensitivity analysis confirms that the results are robust. It is suggested that Korea should form friendly policy to ensure the continuous inflows of workers’ remittances and their efficient utilization to ensure economic growth. On the other hand, China should keep an eye to reduce voluntary unemployment leads to decrease in productivity and growth in the country. |
| Keywords: | Remittances; Open Economy; Economic Growth |
| JEL: | F41 F43 F24 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39003&r=fdg |
| By: | Jawaid, Syed Tehseen; Raza, Syed Ali |
| Abstract: | This study investigates the effect of workers’ remittances on economic growth of five South Asian countries namely Pakistan, India, Bangladesh, Sri Lanka & Nepal by employing long time series data from 1975 to 2009. Cointegration results confirm that there exist significant positive long run relationship between remittances and economic growth in India, Bangladesh, Sri Lanka and Nepal while, significant negative relationship exist between remittances and economic growth in Pakistan. Causality analysis shows bidirectional causality between remittances and economic growth in Nepal and Sri Lanka. On the other hand, unidirectional causality exist, runs from remittances to economic growth in Pakistan, India and Bangladesh. Sensitivity analysis confirms that the results are robust. It suggested that policy makers should make policies to reduce the transaction cost to welcome remittances in the region. In addition, countries especially Pakistan should more relying on increasing exports rather than workers’ remittances as foreign exchange earnings for sustainable and long run growth in the country. |
| Keywords: | Remittances; Economic Growth |
| JEL: | F43 F24 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39001&r=fdg |
| By: | Jawaid, Syed Tehseen; Raza, Syed Ali |
| Abstract: | This study investigates the effect of terms of trade and its volatility on economic growth in India by using the annual time series data from the period 1980 to 2010. Cointegration results suggest the significant positive long run relationship between terms of trade and economic growth. On the other hand, volatility of terms of trade has negative and significant effect on economic growth. Sensitivity analysis confirms that the results are robust. It is concluded that beneficial and less volatile terms of trade is better for economic growth in India. Policy makers should focus on diversifying Indian exports to minimize the volatility in terms of trade to ensure economic growth in the country. |
| Keywords: | Terms of Trade; Volatility; Economic Growth |
| JEL: | F13 D8 F43 |
| Date: | 2012–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38998&r=fdg |
| By: | Wang, Chan |
| Abstract: | Growth and development has always spurred outpouring of research. This paper offers a very preliminary survey of recent literature in the field. |
| Keywords: | Growth and development; China's growth; Determinants of economic growth |
| JEL: | O1 O5 O2 O4 O3 |
| Date: | 2012–05–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39037&r=fdg |
| By: | G. d'Agostino; J.P Dunne (SALDRU, School of Economics, University of Cape Town); L. Pieroni |
| Abstract: | This paper considers the effects of corruption and government spending on economic growth. It starts from an endogenous growth model and extends it to account for the detrimental effects of corruption on the potentially productive components of government spending, namely military and investment spending. The resulting model is estimated on a sample of African countries and the results show, first, that the growth rate is strongly influenced by the interaction between corruption and military burden, with the interaction between corruption and government investment expenditure having a weaker effect. Second, allowing for the cyclical economic fluctuations in specific countries leaves the estimated elasticities close to those of the full sample. Third, there are significant conditioning variables that need to be taken into account, namely the form of government, political instability and natural resource endowment. These illustrate the cross country heterogeneity when accounting for quantitative direct and indirect effects of key variables on economic growth. Overall, these findings suggest important policy implications. |
| Keywords: | corruption; military spending; development economics; panel data; Africa |
| JEL: | O57 H5 D73 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:74&r=fdg |
| By: | Parinduri, Rasyad |
| Abstract: | This paper examines the effects of trade on economic growth and growth volatility. Using the 1967-1975 closure of the Suez Canal as an instrument for trade, I find that trade leads to higher economic growth, and lower probability of recession or economic slowdown. There is no evidence that trade reduces growth volatility, however. |
| Keywords: | economic growth; volatility; trade; IV method |
| JEL: | F13 F43 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39040&r=fdg |
| By: | Felipa de Mello-Sampayo; Sofia de Sousa-Vale |
| Abstract: | This paper applies likelihood-based panel cointegration techniques to examine the existence of a long run relationship between GDP, tourism earnings per tourist and total trade volume for a panel of European countries over the period 1988{2010. Removing the cross dependency, our panel tourism-led growth model indicates that tourism development has a higher impact on GDP in the North than in South European countries. The policy implication of this result is that for this group of countries, the best strategy is to raise tourism receipts. Furthermore, the volume of trade shows a signicant and much more stronger eect on the long run economic growth in our sample economies than tourism does. JEL Classication: F43; C33; L83 |
| Keywords: | Tourism; Economic growth; Rank tests; Panel unit root tests; Panel cointegration |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp172012&r=fdg |
| By: | Alexandru Minea (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Antoine Parent (BETA REGLES - BETA REGLES - Université de Nancy 2) |
| Abstract: | In their already-famous 2010 article "Growth-in-a-Time-of-Debt" (AER-100(2)-pp.-573-78), Carmen Reinhart and Kenneth Rogoff show that average post-WW2 economic growth is dramatically declining in advanced economies, once the debt-to-GDP ratio is above a 90% threshold. We explore the relevance of this exogenous threshold using up-to-date econometric techniques, and reveal an endogenously-estimated threshold around a debt-to-GDP ratio of 115%, above which the negative debt-growth link changes sign. Consequently, additional evidence is needed before suggesting policy recommendations regarding growth effects of fiscal policy in such high debt regimes, which may be subject to complex nonlinearities. |
| Keywords: | public debt;economic growth;nonlinear effects;cliometrics |
| Date: | 2012–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00700471&r=fdg |
| By: | Wamboye, Evelyn |
| Abstract: | This study evaluates the impact of public external debt on long term economic growth of forty least developed countries (LDCs). Arellano-Bond SGMM method is used on unbalanced panel data spanning from 1975 to 2010. A comparative analysis based on different debt specifications and samples is provided. Overall, our findings suggest that high external debt depresses economic growth, regardless of the nature of the debt. Furthermore, debt relief initiatives are crucial as evidenced in the lower negative debt effects on growth in HIPCs sub-sample relative to non-HIPCs. Additionally, trade, initial values of FDI and ODA matter in economic growth of LDCs. |
| Keywords: | LDCs; External Debt; Economic Growth; HIPCs |
| JEL: | O47 F34 O57 |
| Date: | 2012–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39031&r=fdg |
| By: | Jawaid, Syed Tehseen; Raza, Syed Ali |
| Abstract: | This study investigates the relationship between workers’ remittances and economic growth by using 7 years average annual data of 113 countries from the period 2003 to 2009. Results indicate the positive and significant relationship between workers’ remittances and economic growth in sample of low income, middle income, high income and all countries. Results also show that the workers’ remittances are more contributing in high income countries as compare to low and middle income countries. Sensitivity analysis has been performed to test the consistency of initial results and confirms that the results are robust. Unconditional convergence results confirm the convergence in all categories. Results confirm that countries are coming together with respect to per capita income. Results of conditional convergence based on workers’ remittances model suggest the low and middle income countries are converging each other more rapidly. Conversely, results show that high income and all countries models are converging each other but at slower pace in conditional model with workers’ remittances as compare to unconditional model. |
| Keywords: | Remittances; Economic Growth; Cross Country Analysis |
| JEL: | O47 F43 F24 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39002&r=fdg |