The Role of Education in Economic Growth

This study examines the effect of the quantity and quality of education on economic growth. Using a number of proxy variables for the quantity and quality of education in a cross section of low and medium income countries, this study finds that education quantity when measured by enrolment ratios, unambiguously influences economic growth. The effect of government expenditure on economic growth is largely indirect through its impact on improved education quality.Economic Growth, Education Quantity, Enrolment, Government Spending on Education, Education Quality, Cross Country

The Financial Sector and Economic Growth

The Mankiw-Romer-Weil (1992) augmented Solow-Swan model is extended to incorporate the financial sector in this study. Distinguishing between financial capital, physical capital and human capital, this study attempts to identify in particular, the effects of financial capital on economic growth. The study is also examines the effects of financial sector efficiency on economic growth. The financial sector augmented model is tested on 35 low and middle income economies. Strong support is found for the financial sector augmented model.Mankiw-Romer-Weil model, economic growth, financial capital, banking sector, convergence

Investment and Savings Cycles and Tests for Capital Market Integration

A spectral analysis of the Australian time series for the investment and savings ratio on monthly data over the period finds that the investment ratio is subject to a cycle of 6 months duration while the savings ratio series is concentrated on a longer swing of 4 to 6 years. The implications for the Feldstein-Horioka test of capital mobility are explained.investment, savings, spectral analysis, Australia

The Efficiency of Emerging Stock Markets: Empirical Evidence from the South Asian Region

This paper examines weak form efficiency in the stock markets of India, Sri Lanka, Pakistan and Bangladesh; and the linkages between these four markets. The Augmented Dicky Fuller (ADF-1979), the Phillip-Perron (PP-1988), the Dicky-Fuller Generalized Least Square (DF-GLS 1996) and Elliot-Rothenber-Stock (ERS – 1996) tests are used to examine stock market efficiency. Weak form efficiency is supported by the classical unit root tests, however, it is not strongly supported for Bangladesh under the DF-GLS and ERS tests. The cointegration and Granger causality tests indicate a high degree of interdependence between the South Asian stock markets.South Asia, India, Sri Lanka, Pakistan, Bangladesh, unit root tests, stock markets, market efficiency

Gender inequality in education: Political institutions or culture and religion?

We investigate empirically whether political institutions or culture and religion underlie gender inequality in education. The dataset contains up to 157 countries over the 1991-2006 period. The results indicate that political institutions do not significantly influence education of girls: autocratic regimes do not discriminate against girls in denying educational opportunities and democracies do not discriminate by gender when providing educational opportunities. The primary influences on gender inequality in education are culture and religion. Discrimination against girls is especially pronounced in Muslim dominated countries.Gender discrimination, education, democracy, religion

International Business Cycles and Remittance Flows

In this paper, we investigate the macroeconomic determinants and the effect of host country business cycles on remittance inflows. Estimating a dynamic panel data model by the system GMM, we document that remittance inflows are pro-cyclical to home country volatility but counter-cyclical to the volatility in host countries. This result does not hold for high income counties for which remittance inflows are acyclical to home country volatility but pro-cyclical to the volatility in host countries. For a host country, remittance outflows are counter-cyclical to the volatility of home countries. Trade openness is the single most important factor that determines both remittance inflows and outflows for the home and host countries, respectively.Remittance, volatility, international business cycle, dynamic panel data

Do the Stock Markets of South Asia Follow a Random Walk?

This paper examines stock market behaviour in India, Sri Lanka, Pakistan, and Bangladesh employing unit root tests, autocorrelation tests and spectral analysis. Evidence suggests that all markets exhibit a random walk. The multivariate cointegration tests based upon the Johansen Juselius (1988, 1990) methodology indicate three long run stochastic trends. The results of the multivariate cointegration tests are corroborated by the Likelihood Ratio block causality tests which indicate a high degree of interdependence between the markets. The generalized impulse response analysis used to examine the effects of a India stock market price shock on the stock price indices of Sri Lanka, Pakistan and Bangladesh show that Pakistan and Sri Lanka are more responsive to price shocks in India than Bangladesh.stock markets, random walk

Does democracy explain gender differentials in education?

This study shows that despite a strong empirical association between gender differentials in enrolment ratios and democracy, that democracy alone does not explain gender differentials in education in Africa and Asia. The results indicate that income, employment in agriculture, religious heterogeneity and colonialism also help explain the under-representation of girls in education in these regions. Countries in which the duration of suffrage has been longer tend to perform better on average in terms of gender equality in education

Does Colonialism Exert a Long Term Economic Impact on Adult Literacy?

Examining the reason for differences in adult literacy rates across countries, this study finds that colonialism exerts a long term negative economic impact on literacy rates of the colonised. Investigating in particular, the effects of the French and British colonisation policies, the results of this study indicate that the colonial legacy remained long after independence, slowing down improvements in literacy rates in the former colonies. In conclusion it is noted that the implementation of policies that will ensure equal access to education for all is important.

How useful is the Theoretical and Empirical Growth Literature for Policies in the Developing Countries?

This paper examines a recent view of Pritchett (2006) that there is a wide gap between the theoretical and empirical growth literature and the policy needs of the developing countries. Growth literature has focussed on the long term growth outcomes but policy makers of the developing countries need rapid improvements in the growth rate in the short to medium terms. We think that this gap can be reduced if attention is given to the dynamic effects of policies. With data on Singapore, Malaysia and Thailand we show that an extended version of the Solow (1956) model is well suited for this purpose. We found that the short to medium term growth effects of investment ratio are much higher than its long run effects and persist. Dynamic simulations for Singapore showed that these short and medium run growth effects are significantly higher than the steady state growth rate for up to 10 years.Solow Growth Model, Endogenous Growth, Dynamic Growth Effects of Investment Rate, Policies for Developing Countries.