Causality between Bank’s major activities and Economic Growth: Evidences from Pakistan

Banking is an important sector of Pakistan’s economy. The two major activities perform by banks are saving and lending. More Deposit saved in banks and more credits provided by banks are considered to have positive impact on economic growth so the aim of this study is to investigate the fact. Johansen test of Co-integration and Granger Causality is employed by using time series data of Pakistan from 1961 to 2013. The results show that there is no co-integration or causal relationship between GDP growth and Deposits in Banks of Pakistan. However there is short run and long run causality running from GDP growth to bank’s lending activities. Hence Government and central bank should make policies by keeping this fact in consideration that bank’s two major activities that are saving and lending does not have impact on GDP growth however GDP growth affects bank’s lending activities

Causality between Bank’s major activities and Economic Growth: Evidences from Pakistan

Banking is an important sector of Pakistan’s economy. The two major activities perform by banks are saving and lending. More Deposit saved in banks and more credits provided by banks are considered to have positive impact on economic growth so the aim of this study is to investigate the fact. Johansen test of Co-integration and Granger Causality is employed by using time series data of Pakistan from 1961 to 2013. The results show that there is no co-integration or causal relationship between GDP growth and Deposits in Banks of Pakistan. However there is short run and long run causality running from GDP growth to bank’s lending activities. Hence Government and central bank should make policies by keeping this fact in consideration that bank’s two major activities that are saving and lending does not have impact on GDP growth however GDP growth affects bank’s lending activities

The Relationship between Energy Consumption, Economic Growth and Carbon Dioxide Emission: The Case of South Africa

This paper investigates the relationship between energy consumption, carbon dioxide emission, economic growth, trade openness and urbanisation for South Africa. The annual data for the period between 1971 and 2013 is employed. The results of Johansen test of co-integration show that there is a long run relationship between energy consumption, carbon dioxide emission, economic growth, trade openness and urbanization in South Africa. The results for the existence and direction of Vector Error Correction Model (VECM) Granger causality indicates that there is bidirectional causality flowing between energy consumption and economic growth in the long run. The VECM results further found a unidirectional causality flowing from carbon dioxide emissions, economic growth, trade openness and urbanisation to energy consumption and from energy consumption, carbon dioxide emissions, trade openness and urbanisation to economic growth. These results posit a fresh perspective for creating energy policies that will boost economic growth in South Africa. Keywords: Energy consumption, Economic growth, Carbon dioxide emission, South Africa JEL Classifications: O13, Q4

DO OIL PRICE SHOCK, AND OTHER MACROECONOMIC VARIABLES AFFECT THE STOCK MARKET: A STUDY OF THE SAUDI STOCK MARKET

Purpose of the study: This work aims to find the type of relationship amongst the chosen variables, inflation (INF), short-term interest rate (SIR), money supply (M.S.) and crude oil price (COP) and oil price shocks represented by DUMMY respectively on the capital market of Saudi Arabia. It will also throw insight to policymaker to find factors which influence the capital market of Saudi Arabia and to take remedial measures to boost investment in the country. Research Methodology: The relationships amongst the Saudi security market, the oil price shock, and the selected macroeconomic variables as mentioned above are determined using the Johansen test of co-integration, the vector error correction model, and the Wald test. The research employs the time series data for a period of 2009to 2016, for the study. Findings: The results show a long-run equilibrium relationship between the Saudi stock market and the selected variables for the study. The study shows a positive association between the money supply and the stock market, but inflation, short-term interest rate, and crude oil price, the result indicates a negative relationship. Implications: The present study can have implications for the policymaker to take corrective measures for better performance of the stock market by controlling inflation and regulating the short-term interest rate.As the findings indicate that they have a negative relationship with TASI. This paper will also help the policymaker in identifying the real cause for the decline in the value of the stock price. A good performing stock market means better economic growth and overall economic development. To diversify the economy to have an alternative to the oil-driven economy to a more balanced economy by promoting other sectors like manufacturing and tourism. Novelty/Originality of this study: The literature review confirms that all work of oil price shock is related to its effect on the security market return. This work is different from the other study as it includes macroeconomic variables in the study, together with the oil price shocks. The study is unique from other studies as it is broader in approach, by including more variables than earlier studies which mostly included the oil price shocks and its impact on the stock market. There is no work done to investigate the joint effect of macroeconomic variables and oil price shocks on the Saudi stock market

The Relative Effects of Fiscal and Monetary Policies on Ethiopian Economic Growth

The purpose of this paper is to investigate the relative effect of monetary policy and fiscal policy on economic growth in Ethiopia. The paper employed annual time series data from a period of 2009 to 2019. The paper performed Augmented Dickey-Fuller test for unit root, Johansson test of co-integration and Ordinary Least Squares estimation technique to analyze the data. The findings revealed that monetary policy proxy by interest rate has significantly a negative effect on the Ethiopian economic output. Likewise, the study found that fiscal policy proxy by government expenditure has significantly and positively influenced the economic growth (GDP) in Ethiopia. Finally, the study exposed that fiscal policy is somewhat influential than monetary policy in altering economic growth of Ethiopia. The study suggested that both fiscal and monetary policies should be implemented simultaneously to ensure macroeconomic stability and sustainable economic growth in Ethiopia. It is also recommended that government annual budget and projects implementation should be monitored adequately to ensure price stability, full employment, and economic growth. Monetary policies implemented by the National Bank of Ethiopia should promote conducive investment atmosphere through appropriate stabilization of interest rates, and inflation rates to promote economic growth of the country. DOI: 10.7176/PPAR/10-11-01 Publication date: November 30th 2020

Factors Affecting Unemployment in Somalia

This study is an attempt to investigate the determinants of unemployment in Somalia. Annual data series is used from the period 1995 to 2014. Unit root test is used to check the stationarity of the variables and employed Ordinary least squares (OLS) regression method. Johansen co-integration technique was applied to determine long run relationship between the variables. Granger causality was used to test bidirectional and unidirectional relationships among the variables. The empirical findings suggest that there are two co-integrating vectors during the concerned period of time in Somalia. The study found a positive relationship ofpopulation growth, external debt and GDP with unemployment and negative with, GCF and exchange rate. Key terms: Unemployment, GCF, GDP, Exchange rate, Population growth, and External Debt

Impact of Crude Price Volatility on Levels of Economic Activity: Evidence from Iraq

Global oil markets witnessed intense price volatility in the recent years. Volatility of crude oil price is perceived as a significant source of economic fluctuation. It could likely affect levels of economic activities whether in oil exporting or in oil importing economies. The following study proves that the impact of oil price shocks is not exclusive to oil importing economies. Iraq's developing economy which is highly dependent on oil exports as a main source of revenues is vulnerable to oil price shocks. This study employs a multivariate autoregressive regression (VAR) model to investigate the impact of crude oil price volatility on levels of economic activity in Iraq. The time series datasets employed in the study are tested for stationarity and co-integration using the augmented Dickey-Fuller (ADF) unit root test and Johansen test for cointegration respectively. The model’s results confirmed the highly significant impact of volatility of crude oil price on levels of GDP in Iraq

The Effect of Government Sectoral Expenditure on Poverty Level in Kenya

This study investigated the effect of sectoral government expenditure on poverty level in Kenya Private Consumption per capita a measure of poverty was the independent variable while education health agriculture and infrastructure expenditures were the independent variables Time series data for the period of 1964-2010 was used and was tested for unit root using Augmented Dickey Fuller test whereby all variables were found to be integrated to I 1 A lag length of three was selected using Vector Autoregressive model Presence of co-integration was confirmed using the Johansen test which showed there was one co-integrating equation Vector Error Correction model indicated that there was a stable long run relationship between poverty level and sectoral government expenditure in Kenya The regression results indicated that agriculture and health expenditures have a positive and significant effect on poverty level while infrastructure expenditure has a negative and significant effect on poverty level The effect of education expenditure on poverty level was insignificant It is recommended that the government in Kenya increases expenditure allocation to agriculture and health sector