Productivity growth recovery mechanisms: an ARDL approach lessons from the United States, Japan and South Korea

Productivity growth is an essential ingredient for achieving long-term economic growth and sustainable development. In the absence of such growth, economic growth is not achievable. Accordingly, this paper examines economic resilience through multiple productivity channels within the United States, Japan and South Korea. Adopting a Kaleckian post-Keynesian approach, productivity growth is constructed as a function of investment, capacity utilisation, indicators of financial development, and an indicator of fiscal policy. Utilising annual historical data from 1980-2019, this paper adopts Autoregressive Distributed Lag (ARDL) models, Vector Autoregressive-based Impulse Response Functions (IRF) and Variance Decompositions (VD) to examine the resilience of productivity growth through the speeds of adjustment after an external shock. Results show that long and short-run unidirectional causality between productivity growth and the explanatory variables exists amongst all economies through the errorcorrection terms (ECT) and ARDL models. When imposing a simulated one-time S.D. shock upon the explanatory variables, differing speeds of adjustment and recovery processes in the long-run are present. As such, the strength of causal relationships amongst productivity growth and the explanatory variables ultimately affects speeds of adjustment and hence recovery

Does time varying risk premia exist in the international bond market? An empirical evidence from Australian and French bond market

The presence of risk premium is an issue that weakens the rational expectation hypothesis. This paper investigates changing behavior of time varying risk premium for holding 10 year maturity bond using a bivariate VARMA-DBEKK-AGARCH-M model. The model allows for asymmetric risk premia, causality and co-volatility spillovers jointly in the global bond markets. Empirical results show significant asymmetric partial co-volatility spillovers and risk premium exist in the bond markets. The estimates of the bivariate risk premia show bi-directional causality exist between the Australia and France Bond markets. Overall results suggest nonexistence of pure rational expectation theory in the risk premium model. This information is useful for the agents' strategic policy decision making in global bond markets

Modeling and forecasting population growth of Bangladesh

Information about the population growth of a country is an important issue that helps keeping the gross domestic product at a standard level without accelerating inflation rate. This is the condition demanded by the International Monetary Fund (IMF) and World Bank (WB) for allocating funds for the development of the underdeveloped countries like Bangladesh. The population growth is the main target of Bangladesh government to keep the level of growth at a manageable level. This paper proposes an autoregressive time trend (ARt) model for forecasting population growth of Bangladesh. Using data from 1965 to 2003 and using the proposed ARt model this paper finds a downward population growth for Bangladesh for the extended period up to 2043

How does FDI affect domestic firms' wages? theory and evidence from Vietnam

This paper explores the role of inward foreign direct investment (FDI) as a determinant of domestic firms' wages, namely wage spillovers. We first construct a theoretical model to demonstrate that the presence of FDI firms affects domestic firms' expected average wages via productivity spillovers and a cut-off capability. We then estimate FDI-induced wage spillovers by employing IV-GMM estimator with a five-year panel dataset of a growing service industry in Vietnam. Despite FDI firms on average pay 2.25 times that of domestic firms, they put a downward pressure on domestic firms' wages. A one percent increase in FDI presence causes domestic firms to cut average wages by 2.03 percent. The estimations also find that firm-specific features are attributable to significant differences in their wages as well as FDI-linked wage spillovers

Essentials of Business Statistics: communicating with numbers

Essentials of Business Statistics is designed for a new generation of students. This text sparks student interest and bridges the gap between how statistics is taught and how practitioners think about and apply statistical methods. Designed for a one-semester course, the emphasis is on communicating with numbers as opposed to just number crunching. Throughout the text, students are exposed to statistical information using real life examples. The focus is on writing and communicating results rather than merely the process of getting to the correct answer. This unique approach helps present the subject matter in a straightforward and relevant manner. As a result, students learn how to take data, apply it, and convey the results in a meaningful way

Uncovering leadership issues in Papua New Guinea

This paper is an exploratory study of the unique leadership issues in the Papua New Guinean (PNG) context. PNG leadership issues are not adequately explained by the extant literature (Prideaux, 2006). Leadership theories based on ‘Western’ culture are not directly transferable to developing countries (Littrell, 2002). Leadership issues were tested. The paper reports that traditional leadership practices in the work place, foreign culture, and global economic conditions are significant issues influencing leadership in PNG. Our results uncover the necessity for an integrative leadership approach contextualised to PNG’s unique diversity and complexity, if the country is to fully participate in an increasingly globalised world. Limitations and further research are considered

Factors affecting occupational choice in Papua New Guinea

A modified multinomial logit model, estimated by the robust maximum likelihood method, is used to investigate the degree to which 'nationally significant' leadership barriers and personal characteristics affect individual occupational choice in Papua New Guinea (PNG). Despite the changing nature of occupations, increasing influence of 'western' leadership and management practices and the impact of gender, there is a paucity of literature investigating the most significant factors influencing occupational choice in PNG's predominately patriarchal society. By combining 'nationally significant' leadership barrier variables and personal characteristics, this study develops an occupational choice model that predicts the, probability that an individual will choose one of four occupations considered in this study. Empirical analysis based on survey data, finds statistically significant impact of leadership barrier variables and all individual characteristics, except gender, in predicting occupational choice in PNG

How resilient is the investment climate in Australia? Unpacking the driving factors

A resilient economy is the ultimate aspiration of Government authorities and legislators. Economic recovery, one of the cornerstones of economic resilience, measures the speed at which a system recovers from an exogenous and adverse shock. This paper focuses on the resilience of private sector investment within Australia to test its adaptability and absorbability against external shocks. This paper utilises a Kaleckian-Post Keynesian approach to investment, whereby capacity utilisation, profit share, interest rates, and productivity growth are contributing factors. Research, however, has provided evidence that the incorporation of financial development and fiscal policy within the investment model has been largely ignored within the literature. Accordingly, this paper incorporates such indicators to capture their role in modelling approaches. Using annual historical data from 1980 to 2015, this paper adopts a Vector Error Correction Model (VECM), Impulse Response Functions (IRF) and Variance Decompositions (VD) to examine investment’s resilience against external disturbances. Results show that both long and short-run unidirectional causality between investment and the explanatory variables was evident, by identifying cointegrating vectors. The results confirm that government expenditure is the more powerful mechanism of the two, suggesting that a permanent incorporation into the model should be taken seriously. A simulated onetime shock upon the explanatory variables towards investment shows volatile and positive long-lasting reactions, with no sign of returning to pre-shock levels in the long-run. The results showed the changes in profit and the private sector’s productive capacity are the most important indicators capable of explaining variations in private sector investment decisions in Australia

Testing and modeling nonlinearity of the stocks returns

Most of the earlier work on time series analysis was based on the assumption of linearity of the data generating processes. However, there are occasions when the theory and data suggest that linear models are unsatisfactory. In this paper we have applied a few nonlinearity tests to the world stocks prices. It is found that all of the six stock prices considered in this paper are nonstationary. The stock's returns, however, are all stationary. Nonlinearity tests revel that not all of the returns series are linear. Hence modeling nonlinearity is eminent

Sources of volatility persistence: a case study of the U.K. pound/U.S. dollar exchange rate returns

This paper utilizes a new approach to examine the inherent nonlinear dynamics of the exchange rate returns volatility. Specifically, we utilize a regime switching threshold (i) generalized autoregressive conditional heteroskedasticity (RS-TGARCH) and (ii) a fractional generalized autoregressive conditional heteroskedasticity (RS-TFIGARCH) model. The RS-TGARCH model is found to be adequate in analyzing the first two moments of the U.K. pound/U.S. dollar monthly exchange rate returns series. The RS-TFIGARCH is found to be adequate for the daily returns series. The volatility persistence and leverage effects associated with exchange rate returns series are jointly tested by means of a Wald Chi-square test