Tax Burden and GDP: Evidence from Frequency Doman Approach for the USA

We employed Breitung and Candelon's (2006) frequency domain approach to investigate the short-and long-run Granger-causality from different tax burden to GDP in the USA for the period 1947:1 –2009:3. The frequency domain analysis shows that current receipts, personal current tax, taxes on production and imports and taxes on corporate income do not Granger-cause GDP, both at the short and high frequency level; however, current tax receipts Granger-cause GDP in the frequency range of (0.9,1.9), corresponding to the cycle of to 3 months to 7 months. These results suggest that when the USA looks forward to rebalancing her GDP, by means of taxation, it is preferable to reconsider the tax structure with a focus on current tax receipts. This is so because by changing the structure of current tax receipts, the USA will be able to earn more revenue, even in the initial stage. However, if the USA decides to increase welfare, with the stability and sustainability of GDP, the policy makers are advised to readjust the tax burden by infusing the changes of the current receipts, personal current tax, taxes on production and imports and taxes on corporate income.Granger causality in frequency domain, GDP, Tax burden

Comparative performance of renewable and nonrenewable energy source on economic growth and CO2 emissions of Europe and Eurasian countries: A PVAR approach

In the study, we analyzed the relative performance of RES and NRES on economic growth in European and Eurasian countries in a panel framework. The dynamics of these variables are also analyzed in relation to CO2 emissions. We used PVAR approach for analysis for the period 1965 to 2009 and find that growth rate of NRES has negative impact on the growth rate of GDP and also increase CO2 emissions. The imapct of RES, in general, is found to be positive on the growth rate of GDP. Hence, we recommend the reduction of the consumption of NRES in order to attain higher economic growth, increase economic efficiency and employment with clean and sustainable environment in Europe and Eurasian countries.Renewable and nonrenewable energy sources, Economic growth, CO2 emissions, PVAR

Corporate governance and economic growth

We estimated the impact of the performance of corporate governance on economic growth in a cross-country framework in two specifications. For analysis we have employed log liner model. We found that performance of corporate governance is significantly negatively related to the economic growth in both specification and in all models and hence it matters not only for the current year but it continues to persistent in future also. Addition to it, we found that role played by human capital is insignificant but physical capital and government final consumption expenditure plays significantly positive role in the economic growth of cross-section of countries. We also find that impact of life expectancy and fertility rate is negative and positive on economic growth respectively. We found that trade does not has significant impact on the economic growth in cross-section of countries.Corporate governance, Economic growth, Cross-country

A structural VAR analysis of renewable energy consumption, real GDP and CO2 emissions: Evidence from India

This study has attempted to analyze the dynamics of renewable energy consumption, economic growth, and CO2 emissions. For the analysis, we used structural VAR approach. Results of unit root tests show that all variables are non-stationary at their level form and stationary in first difference form and cointegration analysis, analyzed through Johansen-Juselius (1990), shows that there is no evidence of cointegration among the test variables. The innovations analysis of study reveals that a positive shock on the consumption of renewable energy source increases GDP and decreases CO2 emissions and a positive shock on GDP have a very high positive impact on the CO2 emissions. The variance decomposition shows the share of consumption of renewable energy source explained a significant part of the forecast error variance of GDP and a relatively smaller or negligible part of the forecast error variance of CO2 emissions.Renewable energy consumption, economic growth, CO2 emissions, SVAR

Are exports and imports cointegrated in India and China? An empirical analysis

This study analysis the sustainability of the trade deficits in the two giant economies of Asia, namely India and China with allowance of endogenous structural breaks. We found that trade deficit is sustainable in case of India but not in case of China. This implies that macroeconomic policies of India but not of China have been effective in leading exports and imports to long run steady state equilibrium relationship.Exports, Imports, Endogenous multiple structural breaks.

Governance and Foreign Aid in ASIAN Countries

This paper examines the determinants of flow of foreign aid in the 20 ASIAN countries in a panel framework. The model includes the foreign aid, foreign direct investment, six measures of governance, along with the purely economic variables which have been taken as control variables. Estimation analysis was carried out by using pooled annual time series data from 2002 to 2008 in the framework of fixed and random effect model. Relevance of GMM (1991) and GMM (1998) estimates were also evaluated. We find that there is strong evidence of significantly positive impact of past year's aid flow and regulatory quality on the current year's aid flow while significantly negative impact of exports of goods and services, political stability and control over corruption on the current year's aid flow, weak evidence of the negative impact of population, voice and accountability, and rule of law on the current year's aid flow and weak evidence of significantly positive impact of government effectiveness on the current year's aid flow.Foreign Aid, Governance, Panel Data, Generalized Method of Moments

Does financial development increase rural-urban income inequality? Cointegration analysis in the case of Indian economy

The aim of paper is to investigate the affect of financial development on rural-urban income inequality in India over the period of 1960-2008. In doing so, ARDL bounds testing approach was applied to examine cointegration and Ng-Perron unit root test to check the order of integration of the variables. The results confirmed the existence of cointegration showing long run relationship among the test variables. Furthermore, empirical evidence indicated that financial development, economic growth and consumer prices increase gap between rural-urban earnings. The present study has opened new sights for policy making authorities to implement appropriate economic policies to reduce the rural-urban income inequality in India.Financial development, Rural-urban inequality, India, ARDL.

Economic Growth and FDI in Asia: A Panel-Data Approach

This study examines the impact of foreign direct investment on economic growth in Asian countries. We did our analysis in the panel framework for the period 1986 to 2008. We also examined the nonlinearities associated with foreign direct investment and exports in the economic growth process of Asian countries under consideration. We find that both foreign direct investment and exports enhance the growth process. In addition, labour and capital also play an important role in the growth of Asian countries. We suggest an export-led growth path particularly at the initial stage of growth and in the later period, dependence on FDI might be a feasible option.Growth, FDI, Connection, Effects, Panel analysis

The frequency domain causality analysis between energy consumption and income in the United States

We investigated Granger-causality in the frequency domain between primary energy consumption/electricity consumption and GDP for the US by employing approach of Lemmens et al. (2008) and covering the period of January, 1973 to December, 2008. We found that causal and reverse causal relations between primary energy consumption and GDP and electricity consumption and GDP vary across frequencies. Our unique contribution in the existing literature lies in decomposing the causality on the basis of time horizons and demonstrating bidirectional the short-run, the medium-run and the long-run causality between GDP and primary energy consumption/electricity consumption and thus providing evidence for the feedback hypothesis. These results have important implications for the US for planning of the short, the medium and the long run energy and economic growth related policies.Através do teste de casualidade de Granger, nós investigamos o domínio de frequência entre o consumo primário de energia/eletricidade e o produto interno bruto (PIB) dos Estados Unidos; aplicando a abordagem de Lemmens et al. (2008) e cobrindo o período entre Janeiro de 1973 a Dezembro de 2008. Nós achamos relações causal e causal reversa entre o consumo primário de energia e PIB, e o consumo de eletricidade e PIB variam através das frequências. Nossa contribuição única na literatura existente reside na decomposição da causalidade com base em horizontes de tempo e demonstração bi-direcional de causalidade de curto prazo, médio-prazo e longo-prazo entre PIB e consumo primário de energia/eletricidade e assim provendo evidência para a "feedback hypothesis". Estes resultados têm importantes implicações para o planejamento energértico de curto, médio e longo prazo dos Estados Unidos e políticas relacionadas ao crescimento econômico

Corruption, democracy and bureaucracy

This paper examines the relationship of corruption with democracy and bureaucracy in the 82 countries in a panel framework. For the analysis we use rule of law, regulatory quality, control over corruption and secondary school enrollment ratio as control variables. We find that democracy, rule of law and control over corruption decreases the level of corruption. When we allowed for interaction effect among independent variables we find the evidence of strong interaction effect between all of the explanatory variables. We also find that, surprisingly, higher democracy and rule of law are positively associated with the level of corruption while higher bureaucracy negatively