• Title/Summary/Keyword: Economic Growth

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Optimal Inflation Threshold and Economic Growth: Ordinal Regression Model Analysis

  • DINH, Doan Van
    • The Journal of Asian Finance, Economics and Business
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    • v.7 no.5
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    • pp.91-102
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    • 2020
  • The study investigates the relationship between the inflation rate and economic growth to find out the optimal inflation threshold for economic growth. Therefore, this study applied an ordinary least square model (OLS) and the ordinal regression model, and collected the time-series data from 1996 to 2017 to test the relationship between inflation and economic growth in the short-term and long-term. The sample fits the model and is statistically significant. The study showed that 96.6% of correlation between inflation rate and economic growth are close and 4.5% of optimal inflation threshold is appropriate for economic growth. It finds that the optimal inflation threshold is base to perform economic growth, besides the inflation rate is positively related to economic growth. The results support the monetary policy appropriately. This study identifies issues for Government to consider: have a comprehensive solution among macroeconomic policies, monetary policy, fiscal policy and other policies to control and maintain the inflation and stimulate growth; have appropriate policies to regulate inflation to stimulate economic growth over the long term; set a priority goal for sustainable economic growth; not pursue economic growth by maintaining the inflation rate in the long term, but take appropriate measures to stabilize the inflation at the optimal inflation threshold.

Impact of Debts on Economic Growth of Bangladesh: An Application of ARDL Model

  • Hossain, Muhammad Amir;Shirin, Shabnam
    • Asia-Pacific Journal of Business
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    • v.7 no.1
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    • pp.1-10
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    • 2016
  • This study attempts to investigate the effects of different types of debts on economic growth in Bangladesh using time series data spanning from 2000 to 2015. In this study, the RDL model has been applied to determine the long run relationship among the selected variables. The result of the ARDL model shows that there exists a long term relationship between economic growth and the debt variables. It was evident from the findings that there exists bidirectional causality between public sector external debt and economic growth. Causality between private external debt and economic growth has been found to be insignificant. However, causality between domestic debt and economic growth showed a unidirectional causality from domestic debt to economic growth and not vice versa. Causality tests suggest that impact of domestic debt on economic growth is more effective compared to external debts.

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A Study On Causal Relationship between Exchange Rate and Economic Growth in Korea (한국의 환율과 경제성장과의 인과관계)

  • Choi, Bong-Ho
    • International Commerce and Information Review
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    • v.10 no.1
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    • pp.329-347
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    • 2008
  • The purpose of this study is to examine the causal relationship between the exchange rate and economic growth, and to induce policy implications. In order to test whether time series data is stationary and the model is fitness or not, we put in operation unit root test, cointegration test. And we apply Granger causality based on an error correction model. The results indicate that uni-dierctional causality between exchange rate and economic growth is detected. Exchange rate impacts on economic growth, but economic growth don't impact on exchange rate. The analysis of impulse reaction function shows that the impulse of exchange rate impacts on Korean economic growth in negative direction. We can infer policy suggestion as follows: The fluctuation of exchange rate much affects economic growth, thus we must make a stable policy of exchange rate to continue economic growth.

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How Does Financial Development Impact Economic Growth in Pakistan?: New Evidence from Threshold Model

  • TARIQ, Rameez;KHAN, Muhammad Arshad;RAHMAN, Abdul
    • The Journal of Asian Finance, Economics and Business
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    • v.7 no.8
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    • pp.161-173
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    • 2020
  • This study examines the nonlinear relationship between financial development and economic growth in Pakistan using the threshold regression model for the period 1980-2017. We also employed quantile regression with 0.25, 0.50, and 0.75 quantiles of conditional distribution. The quantile regression is based on minimizing of sum of squared residuals. The result indicates that economic growth responds positively to financial development when the level of financial development surpasses the threshold value of 0.151. However, when financial development lies below the threshold value (that is, 0.151), its impact on economic growth is negative. Thus, when financial development of Pakistan surpasses the threshold level, it contributes more towards economic growth since greater level of financial development contributes more to boosts economic growth. This finding reveals that economic growth reacts differently to financial development, and the relationship between financial development and economic growth is U-shaped in Pakistan. Among the other variables, physical capital, labor force, and government expenditure exert a positive effect on economic growth. Furthermore, inflation rate and trade openness have an insignificant impact on economic growth. The results of quantile regression also confirm the non-linear relationship between financial development and economic growth in Pakistan. The finding of this study suggests revamping of financial sector policies in Pakistan.

A Study on the Impact of Sport Industry on Economic Growth: An Investigation from China

  • He, Yugang
    • Journal of Sport and Applied Science
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    • v.2 no.2
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    • pp.1-10
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    • 2018
  • Prior literature has posited that the sport industry has been effective method to drive the economic growth. Given the rationale, this study sets China as a research object with a quarterly data from the first quarter of 2003 to the fourth quarter of 2017 to explore how the sport industry affects economic growth. This study employed Johansen cointegration test and dynamic ordinary least squares as methods for an empirical analysis. The input of sport industry, the labor input, the capital input, and the economic growth are used as research variables. The results show that there is a long-run relationship among them. Johansen cointegration test's estimation indicated that 1% increase in the input of sport industry will lead to 0.064% increase in economic growth. Dynamic ordinary least squares' estimation showed that whenever in the one lead, in the one lag and in the present period, the input of sport industry always poses a positive effect on economic growth. Labor input also has a positive effect on economic growth. The capital input has a negative effect on economic growth. Finally, even though the input of sport industry has a positive effect on economic growth, its impact on economic growth is relative weak.

External Debt and Economic Growth: A Dynamic Panel Study of Granger Causality in Developing Countries

  • ZHANG, Biqiong;DAWOOD, Muhammad;AL-ASFOUR, Ahmed
    • The Journal of Asian Finance, Economics and Business
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    • v.7 no.11
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    • pp.607-617
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    • 2020
  • This study investigates the causal relationship between public and private external debt and economic growth in developing countries. Our model includes 18 selected Asian developing and transition economies from 1995 thru 2019. We employ the dynamic heterogeneous panel data methods, pooled mean group (PMG), robust cross-sectional augmented autoregressive distributed lag (CS-ARDL), and pairwise panel causality test. The results of PMG and CS-ARDL show the existence of causality between external debt and economic growth both in the short-run and long-run. The pairwise Granger causality test found the bidirectional causal relationship runs from total external debt, public external debt, and private external debt to economic growth and economic growth to external debt. The results showed first the existence of causality in the short-run and long-run between external debt and economic growth and the second, bi-directional causality that runs from external debt to economic growth and economic growth to external debt. Both the dynamic models and robust estimator found the same inferences about the impact of main variables on economic growth in Asian developing and transition economies. The findings of this study suggest to assure debt management, investment in productive sectors, increase domestic savings, decrease external dependency, and focus on international trade.

Effects of Human Capital and Innovation on Economic Growth in Selected ASEAN Countries: Evidence from Panel Regression Approach

  • CHE SULAIMAN, Nor Fatimah;SAPUTRA, Jumadil;MUHAMAD, Suriyani
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.7
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    • pp.43-54
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    • 2021
  • Human capital and innovation capacities are essential elements and one of the sustainable approaches to driving economic growth. However, there is debate among scholars concerning these two factors in fostering economic growth. This study investigates the relationships between human capital and innovation capacity and economic growth in selected ASEAN countries, namely, Malaysia, Thailand, and Indonesia. Economists widely discussed the interrelation of human capital and innovation. A large body of literature stated that human capital is an essential factor and engine of economic growth. Innovation has become key in transforming the economic development of developing countries. We analyze human capital (HC) and innovation capacity (INC) using static panel data analysis. The data analysis shows that the fixed-effect model is the best model in this study. Further, human capital (HC) has a significant positive relationship with economic growth. Meanwhile, innovation capacity has no significant relationship with economic growth. We also found that Malaysia's coefficient of human capital and innovation capacity is higher and more efficient than in Thailand and Indonesia. In conclusion, human capital and innovation capacity are crucial elements for measuring economic growth. Skilled human capital contributes significantly to the economic growth and economic development of a nation.

An Investigation on the Mutual Effect between Tax Revenue and Economic Growth

  • He, Yugang
    • The Journal of Economics, Marketing and Management
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    • v.6 no.3
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    • pp.14-25
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    • 2018
  • Purpose - Taxes cover all aspects of society, especially in terms of resource allocation and economic growth. In reality, the tax revenue is often used to measure the quality of a country's economy. The relationship between tax revenue and economic growth has been paid much attention by academic circles. Due to this background, this paper attempts to investigate the mutual effect between tax revenue and economic growth. Research design, data, and Methodology - The annual datum form 1980 to 2017 are employed to conduct an empirical analysis under the vector error correction model. In this paper, the GDP is treated as an independent variable. The tax revenue is treated as a dependent variable. Furthermore, a menu of statistic approaches will be used to testify the mutual effect between tax revenue and economic growth. Results - Via the co-integration test, the results report that the tax revenue has a positive effect on economic growth in the long run. Through the vector error correction estimation, the results also report that the tax revenue also has a positive effect on economic growth in the short run. Conclusions - This paper provides a view that the tax revenue is a kind of a determinant to promote economic growth. Therefore, the China's government should pay much attention to the improvement of tax revenue system so as to maintain a high-speed economic growth.

The Effect of Artificial Intelligence on Economic Growth: Evidence from Cross-Province Panel Data

  • HE, Yugang
    • Korea Journal of Artificial Intelligence
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    • v.7 no.2
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    • pp.9-12
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    • 2019
  • With the Chinese government's attention to the artificial intelligence industry, the Chinese government has invested a lot in it recently. Of course, the importance of artificial intelligence industry for China's economic development is increasingly significant. The advent of artificial intelligence boom has also triggered a large number of scientists to analyze the impact of artificial intelligence on economic growth. Therefore, this paper use 31 China's cross-province panel data to study the effect of artificial intelligence on economic growth. Via empirical analyses under a series of econometric methods such as the province and year fixed effect model, the empirical result shows that artificial intelligence has a positive and significant effect on economic growth. Namely, the artificial intelligence is a new engine for economic growth. Meanwhile, the empirical results also indicate that the investment and consumption has a significant and positive effect on economic growth. Oppositely, the inflation and government purchase have a significant negative effect on economic growth. These findings in this paper also provide some important evidences for policy-makers to perform precise behaviors so as to promote the economic growth. Moreover, these finding enriches existing literature on artificial intelligence and economic growth.

The Asymmetric Impacts of Human Capital Accumulation through Trade on Economic Growth in the Manufacturing Sector of Korea (한국 제조업의 무역을 통한 인적자본축적이 경제성장에 미친 비대칭적 영향 분석)

  • Choi, Bong-Ho
    • Korea Trade Review
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    • v.44 no.1
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    • pp.1-15
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    • 2019
  • This study aims to analyze the effects of trade on human capital accumulation and economic growth in Korean manufacturing industry. The results of empirical analysis by dynamic panel model are as follows. The increase in exports of skilled labor intensive industries has a positive effect on human capital and economic growth, and the impact of import on human capital accumulation and economic growth has alst a positive impact. The exports of unskilled intensive labor industries have a negative impact on human capital accumulation and economic growth. Imports of unskilled labor intensive industries have negative on human capital accumulation and economic growth. It is difficult to derive statistically significant results for the effects of trade on human capital accumulation and economic growth before and after 2008. However, as a result of the financial crisis in 2008, it seems that the effects have decreased since 2008.