Determinants of financial literacy : empirical evidence from micro and small enterprises in India

The purpose of this paper is to investigate the determinants of general financial literacy, specific financial literacy and overall financial literacy among the Micro and Small Enterprises (MSEs) entrepreneurs. The data has been collected from 309 respondents from three districts in the Punjab state of India. Using ordered logit model, the results depict that the age of the entrepreneur has positive and significant effect on different types of financial literacy for the MSEs in Punjab. The findings also show that the micro and small-service enterprises have significantly higher level of financial literacy than its other manufacturing counterparts. The study also found that entrepreneurs with higher level of education have significantly higher level of all types of financial literacy. The most influencing determinant that affects the financial literacy of the entrepreneurs is found to be the level of gross profit ratio of the enterprise. Higher the gross profit ratio of the firm, significantly higher will be the level of all three types of financial literacy of the entrepreneurs. For policy perspectives, the present study recommends that firms should keep some portion of their profits to educate their employees that enhance the financial literacy. Government should help the MSEs to educate the firms to improve their level of financial literacy

The impact of inflation uncertainty on real stock returns in India

This study examines the transmission and response of inflation uncertainty on real stock returns in India, using multivariate Generalised Autoregressive Conditional Heteroscedasticity (GARCH) and Exponential Generalised Autoregressive Conditional Heteroscedasticity (EGARCH) methodology. Results suggest that inflation uncertainty has had a significantly negative impact on real stock retums for India. These findings are robust and Generalised Impulse Response functions (GJRF) and Granger Causality corroborate the conclusion. These findings have important implications regarding stabilisation policy in general, and especially in the financial market

Foreign aid and economic growth : a cointegration analysis of the six poorest African countries

After more than thirty five years of development assistance, the people in the poorest African countries are still living in poverty. Their real per capita income since 1965 has either declined or remained stagnant. The obvious question is: why could these countries not break the poverty trap despite receiving large inflows of foreign aid? This paper examines the effectiveness of foreign aid for economic growth in the six poorest and highly aid dependent African countries, namely the Central African Republic, Malawi, Mali, Niger, Sierra Leone and Togo. Using cointegration analysis, we have found that a long run relationship exists between per-capita real GDP, aid as a percentage of GDP, investment as a percentage of GDP and openness. However, the long run effect of aid on growth was found to be negative for most of these countries

The effect of high school mathematics on student performance in university : a quantile regression approach

This paper investigates the relative importance of a wide range of variables that may impact on student performance in different Colleges in the University. Using multi-year data set covering 14528 students, we have found that, higher level of Mathematics and English (e. g. extension one and extension two) subjects are significantly positively correlated with the University Admission Index (UAI) in HSC. In contrast General Mathematics and Standard English are significantly negatively affecting the UAI. Using OLS and quantile regression we found that Mathematics (former two unit mathematics) plays a positive and significant role in achieving higher Grade Point Average (GPA) in the Arts, Business and Health Science subjects in the University

Inflation, inflation uncertainty and oil price in Australia

This study examines the link between inflation and inflation uncertainty in Australia using Granger causality tests. An EGARCH model is employed to construct the inflation uncertainty. Using quarterly data this study finds that higher inflation increased inflation uncertainty for the full period and after the inflation targeting period which provides strong support of Fridman’s hypothesis (1977). Using a newly constructed oil price dummy this study also found that oil prices significantly and positively influence inflation for all periods but the effect of an oil price rise on inflation has been curtailed as a consequence of adopting an inflation targeting strategy

The importance of mathematics in university education

This paper investigates the relative importance of prior knowledge of mathematics that may impact on student performance in the university. Using multi-year data set covering 14,528 student, we have found that those students who have done higher level mathematics in high school have done significantly better in the university in any discipline. We have also found that prior knowledge of a higher level of English (e.g. Extension One and Extension Two) increased the overall performance (measured by Grade point Average or GPA) in university significantly

Does prior knowledge of economics and higher level mathematics improve student learning in principles of economics?

Using the instrumental variable two stage least square (IV2SLS) and generalised method of moments (IVGMM) estimations, this paper investigates the relative importance of a wide range of variables on student performance in multiple choice and short answer questions in a first year principles of economics (PE) subject. The multi-year data set provides detailed demographic and performance characteristics of 2186 students enrolled in a major multi-campus university. Results from IVGMM and IV2SLS estimation indicate that higher levels of mathematics and economics taken prior to university are associated with significantly improved student performance in PE. Results also indicate that prior economics knowledge has more influence than prior mathematics knowledge on student performance in PE. Students with better understanding of mathematics perform significantly better in multiple choice questions. On the other hand, prior mathematics knowledge does not significantly affect the marks in short answer questions

Has the link between inflation uncertainty and interest rates changed after inflation targeting?

The purpose of this paper is to establish a link between inflation uncertainty and interest rates for five inflation-targeting countries. The approach takes the form of a time-varying parameter model with a Generalized Autoregressive Conditional Heteroskedasticity (GARCH) specification, used to derive impulse uncertainty and structural uncertainty. This study attempts to establish a link between inflation uncertainty and interest rates for five inflation-targeting countries, i.e. Canada, Finland, Spain, Sweden, and the UK. Decomposing inflation uncertainty into two components - impulse and structural, a positive association was found between the expected inflation and interest rates. Structural uncertainty has a positive and significant effect on interest rates for some countries. It has also been found that the long-run effects of inflation on interest rates are less than unity for the post-inflation targeting period, which implies that in some respect the Central Bank has been successful in targeting inflation. This has allowed the Central Bank to employ a less restrictive monetary policy in an environment of a credible inflation-targeting strategy. Exponential Generalized Autoregressive Conditional Heteroskedasticity (EGARCH) can be used instead of GARCH modelling. This is the first study that has tried to establish the link between different types of inflation uncertainty and interest rates for the inflation-targeting countries to see the effect of inflation targeting

Inflation, inflation uncertainty and macroeconomic performance in Australia

Using quarterly data this study finds that inflation uncertainty have negative and significant effects on inflation and output growth at least after the inflation targeting. We also find that output uncertainty has negative and significant effect on inflation. The study uses a newly constructed oil price dummy variable as a control variable and finds that oil price changes significantly increase the inflation uncertainty. These findings are robust and the Generalised Impulse Response Functions corroborate the conclusions. These results have important implications for inflation targeting (IT) monetary policy, and the aim of stabilisation policy in general

Inflation uncertainty, growth uncertainty, oil prices, and output growth in the UK

This study examines the transmission and response of inflation uncertainty and output uncertainty on inflation and output growth in the UK using a bi-variate EGARCH model. Results suggest that inflation uncertainty has positive and significant effects on inflation before the inflation-targeting period, but that the effect is significantly negative after the inflation-targeting period. On the other hand, output uncertainty has a negative and significant effect on inflation and a positive effect on growth, while oil price rises significantly increase inflation for the UK. Results also indicate that inflation uncertainty significantly reduces output growth before and after the inflation-targeting period. These findings are robust and the Generalized impulse response functions corroborate the conclusions. These results have important implications for an inflation-targeting monetary policy, and for stabilization policy in general