The Mystery behind Foreign Reserve Sterilization: Empirical Evidence from The Gambia

This paper investigates the impact of the foreign reserve on the domestic money supply and the level of sterilization by employing the Auto Regressive Distributed Lag for short-run estimation, the Fully Modified OLS for long run estimation and Granger Causality on a monthly data from 2002 to 2019. The short-run and long-run results revealed that foreign reserve has a positive statistically significant impact on money supply; this suggests a total lack of sterilization on the part of Central Bank of The Gambia. The Granger causality confirms a feedback association between the foreign reserve and broad money supply

The Mystery behind Foreign Reserve Sterilization: Empirical Evidence from The Gambia

This paper investigates the impact of the foreign reserve on the domestic money supply and the level of sterilization by employing the Auto Regressive Distributed Lag for short-run estimation, the Fully Modified OLS for long run estimation and Granger Causality on a monthly data from 2002 to 2019. The short-run and long-run results revealed that foreign reserve has a positive statistically significant impact on money supply; this suggests a total lack of sterilization on the part of Central Bank of The Gambia. The Granger causality confirms a feedback association between the foreign reserve and broad money supply

The Co-Movement between Foreign Reserves, Economic Growth and Money Supply: Evidence from the WAMZ Countries

This paper analyses the impact of foreign currency reserve and economic growth on money supply, using a panel data of five West African Monetary Zone (WAMZs) member states from 2001-2019. The study employed the dynamic Panel techniques (Fully Modified Ordinary Least Square and Dynamic Ordinary Least Square) and the Static method (Fixed Effect model) for robustness check. The long run results showed that foreign currency reserves (FCR) have a positive impact on money supply, implying that a one percent increase in foreign currency reserves augments money supply (M2) by 2.87%, 0.44% and 0.08%, respectively in the long run. Similarly, economic growth is associated with an increase in money supply in both models. Furthermore, the Dumitrescu and Hurlin Causality (2012) estimation revealed a feedback association between foreign currency reserve and money supply. This means that that foreign reserves and money supply are complementary. Conversely, a unidirectional causality moving from economic growth to M2 is observed, demonstrating that economic growth causes M2 and not otherwise. This outcome is explained by the QTM (quantity theory of money) in which the velocity of money is a positive function of total money supply. As money circulates in the economy as a result of a surge in investments, consequently increases money stock. Similarly, investment opportunities that are been exploited day-by-day explains the growing money stock. Central banks should endeavor to monitor the expansionary influence of net foreign assets (NFA) on money supply growth in the WAMZ by establishing suitable methods to sterilize foreign exchange infusions into the economy

Investigating the Asymmetric Effect of Sukuk Returns on Economic Growth - Evidence from Indonesia, a NARDL Perspective

Purpose - This paper aims to examine the asymmetric association between Sukuk returns and economic growth in Indonesia. Design/methodology/approach - The Non-linear autoregressive distributed lag (NARDL) model and Granger causality test are employed from the periods 2014:M1 to 2019:M4, using GDP Growth as a proxy of economic activities, Indonesia Sukuk return index as explanatory variables and inflation and interest rate as control variables. Findings - The results posit a long run asymmetric relationship between Sukuk return and economic growth and that a positive shock on Sukuk returns results to an increase in GDP growth by 0.31% in the long run. Moreover, the results also imply that Sukuk returns and economic growth moves at different magnitude in Indonesia. However, a negative shock in the long run has no impact on economic growth. Finally, the granger causality analysis reported a unidirectional causal association flowing from Sukuk returns to economic growth, while interest and inflation rate has a neutral association with economic growth. Research limitations/implications -The sample size used in this paper is relatively small due to data availability; therefore, contradicting results with other studies conducted with this regard may arise. Practical Implications - An increase in economic growth directly impact on Sukuk returns thereby maximizing the wealth of households and holding corporations. The economy can also feel the negative effect if the reverse happens. Originality/Value: This is one of the first time research is conducted using non-linear auto-regressive distributed lag NARDL to assess the impact of Sukuk issuance on economic growth with special concentration in Indonesia

The Impact of Remittance Flow on Real Effective Exchange Rate: Empirical Evidence from The Gambia

The paper investigates the impact of remittance on real effective exchange rate in The Gambia. The Fully Modified OLS and Dynamic OLS are used on a monthly data from 2009M1 to 2019M12. FMOLS and DOLS estimations revealed that remittance has a positive significant impact on real effective exchange rate in The Gambia, implying that 1% increment in remittance leads to a real appreciation of the Gambian Dalasi (GMD) against the major currencies by 1.5%. Likewise, inflation is positively associated with REER, while the relationship amid foreign reserves and REER is inconclusive. Contrarily, money supply and monetary policy rate were found to have a depreciating impact on REER in both models

Investigating the Asymmetric Effect of Sukuk Returns on Economic Growth - Evidence from Indonesia, a NARDL Perspective

Purpose - This paper aims to examine the asymmetric association between Sukuk returns and economic growth in Indonesia. Design/methodology/approach - The Non-linear autoregressive distributed lag (NARDL) model and Granger causality test are employed from the periods 2014:M1 to 2019:M4, using GDP Growth as a proxy of economic activities, Indonesia Sukuk return index as explanatory variables and inflation and interest rate as control variables. Findings - The results posit a long run asymmetric relationship between Sukuk return and economic growth and that a positive shock on Sukuk returns results to an increase in GDP growth by 0.31% in the long run. Moreover, the results also imply that Sukuk returns and economic growth moves at different magnitude in Indonesia. However, a negative shock in the long run has no impact on economic growth. Finally, the granger causality analysis reported a unidirectional causal association flowing from Sukuk returns to economic growth, while interest and inflation rate has a neutral association with economic growth. Research limitations/implications -The sample size used in this paper is relatively small due to data availability; therefore, contradicting results with other studies conducted with this regard may arise. Practical Implications - An increase in economic growth directly impact on Sukuk returns thereby maximizing the wealth of households and holding corporations. The economy can also feel the negative effect if the reverse happens. Originality/Value: This is one of the first time research is conducted using non-linear auto-regressive distributed lag NARDL to assess the impact of Sukuk issuance on economic growth with special concentration in Indonesia

Exploring the Impacts of Banking Development, and Renewable Energy on Ecological Footprint in OECD: New Evidence from Method of Moments Quantile Regression

Although previous related studies illustrate several factors that reduce and eliminate ecological pollution, empirical evidence that examines the impact of banking development on footprint ecological quality is missed. This study explores the impact of banking development, renewable energy consumption, and economic growth on the ecological footprint of 27 OECD countries spanning data from 1990 to 2018. Using the method of moments quantile regression (MMQR), the results indicated that a 1% increase in banking expansion is projected to augment the ecological footprint in the OECD nations across all quantiles (first to ninth). Thus, the results affirm that banking development dampens ecological sustainability in the OECD nations. In contrast, the results indicate that renewable energy promotes ecological sustainability in the OECD nations across all quantiles (first to ninth). The empirical findings suggest that OECD policymakers should regard banking and economic development as a “green energy fostering mechanism” while designing policies to promote ecological friend energy sources. Moreover, as part of their core mandates, central banks, and regulatory authorities should promote financial innovation in the banking sector to mobilize the required capital to facilitate nature conservation and restoration

Exploring the Impacts of Banking Development, and Renewable Energy on Ecological Footprint in OECD: New Evidence from Method of Moments Quantile Regression

Although previous related studies illustrate several factors that reduce and eliminate ecological pollution, empirical evidence that examines the impact of banking development on footprint ecological quality is missed. This study explores the impact of banking development, renewable energy consumption, and economic growth on the ecological footprint of 27 OECD countries spanning data from 1990 to 2018. Using the method of moments quantile regression (MMQR), the results indicated that a 1% increase in banking expansion is projected to augment the ecological footprint in the OECD nations across all quantiles (first to ninth). Thus, the results affirm that banking development dampens ecological sustainability in the OECD nations. In contrast, the results indicate that renewable energy promotes ecological sustainability in the OECD nations across all quantiles (first to ninth). The empirical findings suggest that OECD policymakers should regard banking and economic development as a “green energy fostering mechanism” while designing policies to promote ecological friend energy sources. Moreover, as part of their core mandates, central banks, and regulatory authorities should promote financial innovation in the banking sector to mobilize the required capital to facilitate nature conservation and restoration

Do Renewable Energy and the Real Estate Market Promote Environmental Quality in South Africa: Evidence from the Bootstrap ARDL Approach

Recent empirical research indicates that South Africa’s present level of wealth and energy, given its fast-expanding population, is unsustainable. Studies in this domain focus on the impact of economic growth and energy use on environmental quality; the role of the real estate market on environmental quality in South Africa is ignored in the emerging literature. The current study aims to deliver a fresh empirical analysis in this context by analyzing the impact of South Africa’s real estate sector expansion and renewable energy sources on carbon emissions. Using the newly developed “bootstrap autoregressive distributed lag (ARDL) approach”, the results of the empirical investigation showed that renewable energy improves South Africa’s environmental quality. The current research also shows that the South African real estate industry has a negative impact on the environment. According to the current research, South African policymakers should create new regulations for the sustainable real estate sector to improve environmental quality by encouraging the usage of and investment in renewable energy

Do Renewable Energy and the Real Estate Market Promote Environmental Quality in South Africa: Evidence from the Bootstrap ARDL Approach

Recent empirical research indicates that South Africa’s present level of wealth and energy, given its fast-expanding population, is unsustainable. Studies in this domain focus on the impact of economic growth and energy use on environmental quality; the role of the real estate market on environmental quality in South Africa is ignored in the emerging literature. The current study aims to deliver a fresh empirical analysis in this context by analyzing the impact of South Africa’s real estate sector expansion and renewable energy sources on carbon emissions. Using the newly developed “bootstrap autoregressive distributed lag (ARDL) approach”, the results of the empirical investigation showed that renewable energy improves South Africa’s environmental quality. The current research also shows that the South African real estate industry has a negative impact on the environment. According to the current research, South African policymakers should create new regulations for the sustainable real estate sector to improve environmental quality by encouraging the usage of and investment in renewable energy