Does Official development assistance for health from developed countries displace government health expenditure in sub-saharan countries?

This paper empirically examines the foreign aid fungibility in the health sector of 45 Sub-Saharan countries over the period of 1995-2012. The aim of the study is to investigate the effect of foreign health aid on government health expenditure by using two methods: the Generalized Method of Moments (GMM) and the Fixed Effect Instrumental Variables (FE-IV). The estimation was conducted on the full sample and on two sub samples: middle- and low-income countries. We found strong evidence of partial fungibility in the health sector as follows: an increase of 1% in health aid leads to an increase of 0.04 to 0.1% of government health spending, noting that the magnitude of fungibility in middle-income countries is higher than in the low-income ones.Scopu

Do Exchange Rate Changes Improve the Trade Balance in GCC Countries: Evidence from Nonlinear Panel Cointegration

This study examines the asymmetric impact of the nominal effective exchange rate (NEER) on the trade balance in GCC countries over the period of 2000:Q1 to 2017:Q4. The empirical findings of the nonlinear pooled mean group (PMG) estimator reveal the presence of a J-curve shape where an increase in NEER (currency depreciation) deteriorates the trade balance in the short run and improves it in the long run. Findings also prove that the trade balance's response to NEER positive changes is greater compared to negative changes. The policy implication of these findings reveals that NEER is a useful tool to sustain the trade balance. 2022 Taylor & Francis Group, LLC.Scopu

A new quadratic asymmetric error correction model: does size matter?

We introduce a new quadratic asymmetric error correction model that comprehensively accounts for both sign and size asymmetries. We also propose a test protocol that allows to rigorously identify different sources of long-run nonlinearity, namely quadratic nonlinearity, size asymmetry and sign asymmetry. We use a nonparametric residual recursive bootstrap technique to report p-values for the long-run tests. Simulation results confirm the consistency of our proposed estimator in finite samples and show that the bootstrapped tests have reasonably good size and power properties. Although our estimation of the Okun's Law for the USA confirms previous findings on the direction of the sign asymmetry, its reveals that the magnitude of the impact of economic downturns on unemployment decreases faster than the impact of upturns. Forecasting results show that our new model performs better than NARDL. 2022, The Author(s).Scopu

Can government expenditure help reconstruct the Syrian economy in the post-conflict period? evidence from the SVAR and nonlinear ARDL models

This paper explores the viability of the fiscal policy in the reconstruction of the Syrian economy. We use the Structural VAR estimation technique to assess the response of real GDP to shocks in government expenditures and exchange rates in the parallel market. We also control for other variables including money supply and oil prices. We find that government spending is an effective tool for economic recovery in particular under a quasi-fixed exchange rate regime. We also employ the nonlinear ARDL (NARDL) model to detect the existence of asymmetrical effects of government spending on real GDP. The NARDL results show that negative changes in government expenditure have more impact on economic growth compared to positive changes. Additionally, the NARDL model reveals that the post-conflict period was characterized by large government spending’ inefficiencies. Finally, we study three alternative government spending’ rebuilding scenarios. We document that reaching the pre-conflict GDP level is possible under two of the scenarios we investigate. Hence, our results provide strong policy implications according to which fiscal policy can, under specific exchange rate regimes, reverse the adverse effects of civil wars

Do labor remittance outflows retard economic growth in Qatar? Evidence from nonlinear cointegration

This paper explores the effects of remittance outflows on real GDP per capita in the Qatar economy. While few works investigated the impact of remittance outflows on economic growth for remitting countries, they did not examine the potential asymmetric impact on economic growth. This study fills this gap by examining the asymmetric impacts of remittance outflows on real GDP per capita and non-oil real GDP per capita in Qatar over the period 2000:Q1-2019:Q4. The empirical estimation is based on an advanced econometrics technique, namely the nonlinear autoregressive distributed lags (NARDL) proposed by Shin et al. (2014). The empirical findings reveal that remittances outflows have negative and significant impact on real GDP per capita in Qatar economy. In particular, positive changes of remittance outflows exert a greater impact on non-oil real GDP per capita than negative changes. A larger increase in remittance outflows would lead to a decrease in the aggregate demand and produce a deflationary pressure. The magnitude of remittance outflows and their asymmetric impact are extremely important outcomes that should be considered by policy makers in this regard. Thus, specific national polices are needed to create a diversified labor market, encourage foreign workers' spending, and increase the local workers' participation in the economy. 2021This Paper was made possible by NPRP grant ( NPRP12S-0311-190314 ) from the Qatar National Research Fund. The statements made herein are solely the responsibility of the author(s).Scopu

The impacts of productivity differentials and oil price on the real exchange rate misalignment: Evidence from a developing country

This study examines the impact of oil price and productivity differentials on real exchange rate (RER) misalignment in Syria from 1980 to 2010. In order to do that, this research develops an index for productivity differential by applying the Autoregressive Distributed Lag (ARDL) bounds test for cointegration proposed by Pesaran et al. (2001). The empirical results found that there is a positive and significant relationship between productivity differentials, oil price, gross capital formation and RER appreciation while government expenditure has an opposite impact. Stability tests show that RER adjusts towards its equilibrium path. The empirical results further conclude that a flexible exchange rate raise the adjustment speed towards the equilibrium in the long run. Consequently, Syria's monetary policy economy should achieve a flexible exchange rate regime to ease the convergence of the exchange rate after a shock occurs. 2019 Inderscience Enterprises Ltd.Scopu

Testing the Kuznets Curve hypothesis for Qatar: A comparison between carbon dioxide and ecological footprint

This paper explores the validity of the Environmental Kuznets Curve (EKC) using two different environment indicators: the carbon dioxide emissions (CO2) and the ecological footprint (EF) in Qatar over the 1980-2011 period. To this end, we investigate the impact of real gross domestic product (RGDP), the square of RGDP, the energy use, the financial development and the trade openness on the CO2 emissions and the EF. We employ the autoregressive distributed lag (ARDL) model with the presence of unknown structural breaks in order to study short-run and long-run elasticity between the variables. The findings infer that there is a long-run relationship among the selected variables with a shift in the cointegration vector in 1991 and 2000. The empirical result indicates that the inverted U-shaped hypothesis is not valid in Qatar when we use the CO2 emissions, whereas the inverted U-shaped held when using the EF. Furthermore, the error correction results confirm that the convergence towards the long-run equilibrium will mostly occur within one year after a short run shock. Generally, the findings suggest that Qatar should invest more in efficient energy and continue sustained its growth. Moreover, more efforts are needed for diversification particularly in technology-intensive and environment-friendly industries to improve environmental quality. 2016 Elsevier LtdScopu

Asymmetric effects of oil price shocks on the demand for money in Algeria

This paper investigates the symmetric and asymmetric effects of real oil prices on real money demand in Algeria over the period 1999:Q1–2020:Q1. Using a linear autoregressive distributed lag model (ARDL), and a nonlinear autoregressive distributed lag model (NARDL), we find no evidence of a long-term relationship among the variables. Interestingly, we reveal that the NARDL model provides strong evidence of a stable money demand. Moreover, the evidence shows that, in the short-term, only real oil price reductions will result in a decrease in real money demand. In the long-term, our findings suggest that oil price increases (decreases) will lead to higher (lower) money demand. Additionally, we find that negative oil price shocks will yield a stronger effect on money demand compared to positive shocks. These results indicate that money demand is a channel through which oil price shocks may affect the macroeconomic activity in Algeria. Therefore, Algerian policymakers should incorporate this asymmetric relationship between oil prices and money demand in designing their monetary policies

Can remittances alleviate energy poverty in developing countries? New evidence from panel data

Universal energy access in developing countries is a key ingredient to achieve sustainable economic growth and social welfare. Therefore, it is of paramount importance for policymakers to identify potential new factors to mitigate energy poverty. In this study, we investigate the effects of workers' remittances on energy poverty in 109 developing countries from 2000 to 2019 using panel fixed and random effects as well as the system generalized method of moment and Lewbel (2012) estimators to address potential endogeneity problems. We demonstrate that remittances can be effectively used to alleviate energy poverty in low and middle-income countries. Moreover, we find that income poverty, human development, institutional quality, and income inequality are important mediating channels through which remittances affect energy poverty. Our results also indicate that improved financial development and increased urbanization tend to enhance energy access. Based on our findings, several recommendations are provided to governments and policymakers for achieving sustainable development goal target 7.1, which aims to guarantee affordable, reliable, and modern energy services for all

The asymmetric effects of oil price on economic growth in Turkey and Saudi Arabia: New evidence from nonlinear ARDL approach

The immediate purpose of this paper is to examine and compare the potential asymmetric oil price effects on real GDP growth in two different countries with differing dependence on oil from the Middle East: Saudi Arabia and Turkey. Saudi Arabia is the major producer of oil in the global market while Turkey is a major user of oil from the region. How do oil price shocks impact on the economic growth of these two major economies from the Middle East? The analysis progresses in three stages: first, we offer a baseline model to explain how oil price shocks can have real effects through their impacts on inflationary expectations and relative price movements. Secondly, a linear ARDL model is tested to explore the long-run dynamics of relative prices and oil price changes. Thirdly, and most importantly, the empirical analysis employs an innovative nonlinear ARDL model proposed by Shin et al. (2014) to estimate the asymmetric long and short run impacts of oil prices. The empirical findings reveal that there is a strong evidence for a stable long run relationship between real GDP, oil price and other explanatory variables. In particular, the asymmetric analysis provides significant results on the difference of the economic growth responses to both positive and negative shocks of oil price. In the case of Saudi Arabia, real GDP response to positive oil shocks is important with larger magnitude compare to the negative shock. On the other hand, real GDP in Turkey react to a positive oil price shock is lower than its react to a negative shock. Our empirical results are extremely important for policy makers regarding the oil production process to achieve sustainable economic growth. Copyright - Mouyad Kassm Alsamara, Mohamed Elafif, Zouhair Mrabet, and Partha Gangopadhyay.Scopu