Trade openness and economic growth in East African Community economies: A panel causality test

Abstract. In spite of financial liberalization that has been discussed and studied over the past decades, the debate for the East African Community (EAC) still remain open on the relationship between trade openness and economic growth that has a link with trade-economic policies. This paper analyzes the relationship by employing the modern methodology of Dumistrescu & Hurlin (2012) Panel Causality test, The Test involved a scope of 46 years from 1970-2016. The empirical finding shows that there is a bidirectional movement (causality) as trade openness increase or relaxed lead to the growth of the economy in the East African Community. The results are supported by the endogenous growth theory that openness increases economic growth. There is a feedback relationship. The main operational implication of these empirical results is that the governments of the East African economies should dismantle barriers to trade to make sure that their intended objective is not ephemeral.Keywords. East African Community, Economic growth, Panel causality test, Trade openness.JEL. C59, F43, O24

The analysis of bubbles and crashes on financial markets for emerging economies: Evidenced From BRICS

Abstract. The study was conducted to analyze the bubbles, and crashes on the financial market in emerging economies; (BRICS) stock prices were employed to detect the existence of the bursting bubble. The Right-tailed Augment Dickey-Fuller Unit Root Test used to complete the study of analyzing bubbles and crashes. The study consists of four primary tests; ADF, RADF, SADF, and GSADF Moreover, the study used the first three criteria. The survey covered the period from 2000 to 2016, to absorb the nuclear currently financial crisis in the BRICS and analyze its impacts. Also, this period coincides with both economic reforms in some countries like China and early indications of an impending US crisis. The findings in all countries rejected the null hypothesis of no bursting bubbles in the stock market in favor of the alternative theory. The findings suggest that such an explosive behavior may be attributable to differences in stock prices of traded goods. The result has economic policy importance and implications on the economy. Keywords. BRICS, Emerging economies, Financial bubble and crashes, Right-tailed ADF, Stock price.JEL. F60, G70, O15