36 research outputs found

    Testing Purchasing Power Parity in Transition Countries: Evidence from Structural Breaks

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    This study examines the validity of the purchasing power parity (PPP) in 8 transition countries for monthly data from 1992:1 to 2009:1. While results from both the ADF unit root and the KPSS unit root test indicate that PPP does not hold for Bulgaria, Croatia, Czech Republic, Hungary, Macedonia (FYR), Poland, Romania and Slovak Republic. In the presence of structural breaks, PPP holds only for Bulgaria and Romania it does not hold for the other 6 transition countries. Testing the stationarity of real exchange rate series by using four types of unit roots tests, the evidence suggests that real effective exchange rate is nonstationary and thus PPP doesn’t hold for all 6 transition countries in the long run. All results emphasized that there is weak evidence about the long-run PPP hypothesis in transition countries and the validity of PPP remains a controversial and unsettled issue.real exchange rate, unit root tests, structural breaks, transition countries

    The Demand for Money in Transition Economies

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    This paper examines the long-run determinants of the demand for money in ten transition countries using panel data for the 1994-2005 period. Using panel unit root tests we rejected the the null hypothesis of the nonstationarity and employed the feasible generalized least squares (FGLS) model. Consistent with theoretical postulates, it is found that (a) the demand for money in the long-run positively responds to real GDP and inversely to the inflation and the real effective exchange rate and (b) the long-run income elasticity is about unity.demand for money, transition economies, panel unit root test, feasible GLS

    Electricity Consumption and Economic Growth Nexus: A Multivariate Analysis for Turkey

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    This study examines the short-run and long-run causality issues between electricity consumption and economic growth in Turkey for 1968–2006 period by using Granger causality models augmented with a lagged error-correction term. The bounds F–test for cointegration test yields evidence of a long-run relationship between employment ratio, electricity consumption per capita and real GDP per capita. The overall results from the three error-correction based Granger causality models show that there is an evidence of unidirectional short-run, long-run and strong causalities running from the electricity consumption per capita to real GDP per capita. But, there is no causal evidence from the real GDP per capita to electricity consumption per capita. In other words, “Growth hypothesis” is confirmed in Turkey. This suggests that electricity consumption plays an important role in economic growth.electricity consumption, economic growth, causality

    The Relationship between Institutional Structure and Economic Growth: A Comparative Analysis for Selected Countries

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    This study explores the long-run relationship between institutional structure and economic growth for selected countries for 1993-2012 period by using dynamic panel data analysis. The results can be summarized as follows: i) There exists a cross-sectional dependence for variables and models ii) All variables are stationary at their first difference except for institutional indicator of second group. iii) There exists a cointegration relationship between non-stationary variables. iv) Institutional structure has positive and statistically significant impact on economic growth in First group of countries. v) There is no significant relationship between institutional structure and economic growth in second group of countries. vi) Gross capital formation has positive impact on economic growth in both groups. Keywords: Institutional Economics, Institutional Structure, Economic Growth, Panel Data Analysis, International Country Risk Guide. JEL Classifications: C33, D72, O5

    Environment–economic Growth Nexus: A Comparative Analysis of Developed and Developing Countries

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    This study aims to examine the interaction between carbon emissions, income, and trade openness in developed and developing countries for the period from 1980 to 2010 by using recently developed panel data econometric methods. The results are as follows i) There is an evidence of the cross-sectional dependence for each variable. ii) The cross-sectionally augmented and Smith et al.'s panel unit root tests are indicate that all variables are stationary at their first difference. iii) A Durbin–Hausman cointegration test shows that there exists a long-term relationship between variables. iv) The results from the common correlated effect (CCE) estimator presents that there is evidence of the validity of the environmental Kuznets curve (EKC) hypothesis in developed countries. v) The EKC hypothesis is not valid in developing countries. Keywords: Economic Growth, Environmental Kuznets Curve, Panel Data Analysis JEL classifications: C33, O57, Q43, Q53, Q5

    The Convergence Behavior of CO2 Emissions in Seven Regions under Multiple Structural Breaks

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    The aim of this paper is to examine the convergence behavior of carbon dioxide emissions per capita (co) in seven regions for 1960-2011 period by using recently developed the second generation panel data methods. Empirical results are as follows: i) there exists cross-sectional dependency for co variable ii) the CADF unit root test without structural breaks shows that the co variable is stationary at its first differences, iii) but the PANKPSS unit root test with structural breaks the co variable is stationary at its level. The overall results indicate that the regional stochastic convergence of carbon emission per capita is valid for the seven regions under structural breaks and any environmental shock has temporary effect. Keywords: Carbon Emissions, Stochastic Convergence, Panel Data. JEL Classifications: C33, Q53, Q5

    KAUZALNI ODNOS POTROŠNJE ELEKTRIČNE ENERGIJE I BDP-a U TURSKOJ: DOKAZI DOBIVENI GRANIČNIM TESTIRANJEM ARDL

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    This paper investigates the long-run and causal relationship between electricity consumption and economic growth in Turkey by using the ARDL cointegration test and Granger causality models. It employs annual data covering the period of 1977–2006. The ARDL cointegration test yields evidence of a long-run relationship between electricity consumption per capita and real GDP per capita. The results from the Granger causality models indicate that there is an evidence of unidirectional causality running from the electricity consumption to economic growth in the long-run. The overall results confirm the “Growth hypothesis” for Turkey. This implies that, energy conservation policies, such as rationing electricity consumption, are likely to have an adverse effect on real GDP of Turkey.†Rad proučava dugoročne i kauzalne veze između potrošnje električne energije i gospodarskog rasta u Turskoj koristeći ARDL (autoregresijski model s distribuiranim vremenskim pomakom) kointegracijski test i Grangerov kauzalni model. Koriste se godišnji podaci za period od 1977. do 2006. ARDL kointegracijski test dokazuje dugoročnu vezu između potrošnje električne energije i stvarnog BDP-a po glavi stanovnika. Rezultati dobiveni Grangerovim modelima kauzalnosti ukazuju na jednosmjernu kauzalnost koja dugoročno vodi od potrošnje električne energije do gospodarskog rasta. Ukupni rezultati potvrđuju «hipotezu rasta» za Tursku. To znači da bi politika uštede energije, kao što je ograničenje potrošnje električne energije, vjerojatno imala negativni učinak na stvarni BDP Turske

    CO2 emissions, energy consumption and economic growth in Turkey

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    This paper examines the long run and causal relationship issues between economic growth, carbon emissions, energy consumption and employment ratio in Turkey by using autoregressive distributed lag bounds testing approach of cointegration. Empirical results for Turkey over the period 1968-2005 suggest an evidence of a long-run relationship between the variables at 5% significance level in Turkey. The estimated income elasticity of carbon emissions per capita is -0.606 and the income elasticity of energy consumption per capita is 1.375. Results for the existence and direction of Granger causality show that neither carbon emissions per capita nor energy consumption per capita cause real GDP per capita, but employment ratio causes real GDP per capita in the short run. In addition, EKC hypothesis at causal framework by using a linear logarithmic model is not valid in Turkish case. The overall results indicates that energy conservation policies, such as rationing energy consumption and controlling carbon dioxide emissions, are likely to have no adverse effect on the real output growth of Turkey.Carbon dioxide emission Energy consumption Economic growth Granger causality Turkey

    Electricity consumption-growth nexus: Evidence from panel data for transition countries

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    This paper investigates the long-run relationship and causality issues between electricity consumption and economic growth in 15 Transition countries (Albania, Belarus, Bulgaria, Czech Republic, Estonia, Latvia, Lithuania, Macedonia, Moldova, Poland, Romania, Russian Federation, Serbia, Slovak Republic and Ukraine) by using the Pedroni panel cointegration method for the 1990-2006 period. Results suggest that the Pedroni panel cointegration tests do not confirm a long-term equilibrium relationship between electricity consumption per capita and real GDP per capita. Moreover, since no cointegration was found, error-correction mechanisms plus causality tests cannot be run for further steps in the long-term to investigate the causality between electricity consumption and economic growth. Overall, it can be said that the electricity consumption related policies have no effect or relation on the level of real output in the long run for these countries. As a conclusion, the literature has conflicting results and there is no consensus either on the existence or the direction of causality between electricity consumption and economic growth. Thus, the findings of this study have important policy implications and it shows that this issue still deserves further attention in future research.Electricity consumption Economic growth Cointegration Panel data Causality Transition countries

    The causal relationship between energy consumption and GDP in Albania, Bulgaria, Hungary and Romania: Evidence from ARDL bound testing approach

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    The purpose of this study is to investigate the causal relationship between energy and economic growth in Albania, Bulgaria, Hungary and Romania from 1980 to 2006 by employing energy use per capita, electric power consumption per capita and real GDP per capita variables. To examine this linkage, we use the two-step procedure from the Engle and Granger model: In first step, we explore the long-run relationships between the variables by using recently developed autoregressive distributed lag (ARDL) bounds testing approach of cointegration. Secondly, we employ a dynamic vector error correction (VEC) model to test causal relationships between variables. The bounds test yields evidence of a long-run relationship between energy use per capita and real GDP per capita and evidence of two-way (bidirectional) strong Granger causality between these variables only in Hungary. On the other hand, the ARDL bounds test results show that there is no a unique long-term or equilibrium relationship between energy consumption variables and real GDP per capita in Albania, Bulgaria and Romania. In other words, no cointegration exists between these variables in these three countries. The econometric analysis suggests that any causal relationships within dynamic error correction model for Albania, Bulgaria and Romania cannot be estimated.Energy consumption Economic growth ARDL Causality
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