Economics
155 theses under this subject heading
Trade Liberalization and Economic Growth: A Time Series Approach for Nigeria
ABSTRACT: The relationship between trade liberalization and economic growth of developing countries has constituted a substantial debate for decades. Findings from some researchers opine a negative effect of trade liberalization policy on the LDCs. Hence, this research work focused on a country case study for Nigeria in investigating whether trade liberalization lead to long run economic growth over a period of 50 years. Using annual data for the period of 1960-2010, a vector error correction model (VECM) is estimated in analyzing the dynamic behavior of economic variables capturing both the short and long-run relationship among them, namely, the Gross Domestic Product (GDP), fiscal and monetary policy variables (G) and (M1), and the openness measure for trade liberalization. The findings reveal that trade openness is highly significant in determining economic growth in the long-run while its impact is negligibly small for the time period of the study. On the other hand, the main determinant of long term economic growth is evidenced to be the monetary policy variable and that the largest response comes from the fiscal policy in correcting for any previous deviation from the long-run equilibrium path of the economy. This may suggest that both monetary and fiscal policies may play a greater role in the long-run economic growth of Nigeria rather than trade openness. Keywords: Trade Liberalization, economic growth, Vector Error Correction Model(VECM). …………………………………………………………………………………………………………………………
The Macroeconomic Determinants of Credit Risk in the Banking Sector of Kyrgyzstan
Credit risk, i.e. the risk of loan default, is a significant risk faced by banks in every country. While banks make loans in order to generate income, by making loans they also face a risk of losing their principal and the interest. As part of their lending business, a small percentage of loan default (non-performing loans) is always expected. However, large volumes of loan defaults can push banks into bankruptcy and can cause financial instability in the banking sector. Therefore, it is important to know the factors affecting the credit risk, i.e. non-performing loans, in the banking sector. Especially in the newly established countries such as Kyrgyzstan, where most of the economic and financial policies are newly introduced and the banking sector is in its infancy, it is vital for the governments to understand the factors that increase the credit risk. This research uses the econometrics analysis to determine the macroeconomic factors that increase the credit risk in the banking sector of Kyrgyzstan. The findings indicate that real GDP growth rate, exchange rate of Som per US Dollar, corruption and the presence of political instability affect the credit risk in Kyrgyzstan. While GDP growth rate is negatively related with the credit risk, the exchange rate, corruption, and political instability are positively related with the same. The findings of this research suggest that in order to reduce the credit risk of banks and promote stability in the banking sector, the policy makers in Kyrgyzstan must promote political stability and economic growth, while the value of the local currency should be stabilized against US dollar. Furthermore the government must take actions to reduce high levels of corruption in the country. Keywords: NPLs, credit risk, banks, corruption, macroeconomy, Kyrgyzstan
Share Price and Macroeconomic Variables in Nigeria: A Granger Causality Approach
The objective of this study is to investigate the relationship between share price and macroeconomic variables in Nigeria using monthly variables from January 2001 to December 2014. Johansen cointegration test is employed to investigate if there is a possible long haul relationship between variables and vector error correction model (VECM) is used to see if thus the long run relationship exists between share price and the variables under study. Estimates reveal the existence one cointegration equation exists between share price and the macroeconomic variables under study. VECM exhibit long run relationship running from CPI, M2, EXR, OP, and INTR to SP and it‟s all statistically insignificant. Furthermore, unidirectional causality exist from OP to SP, SP to M2, SP to EXR, INTR to OP, OP to EXR, M2 to EXR, EXR to INTR and CPI to EXR. However, bidirectional causality exists from EXR to M2. Keywords: Share price, macroeconomic variables, cointegration and Granger causality
Evaluating Turkish Airports Efficiencies Using Data Envelopment Analysis
After the second half of the 20th century, airline transportation increased very rapidly and constituted today’s the most important transportation sector. In addition, increasing globalization all over the world raised the consumer demand for transportation services. Therefore, consumer demand for airline transportation has increased over the few decades. Accordingly, airports which are the infrastructure of the aviation sector became crucially important for maintaining such growing demand. In this context, efficiency of Turkish airports becomes more important with the increasing demand and air transaction movements. In this thesis Turkish airports’ efficiency will be evaluated through the Data Envelopment Analysis. The policy which is developed at the end of this thesis is that, government function on the airport management should be revised or airport managements should be transferred from the state administration to private sector through privatization. Thus, appropriate ground will be ensured for the more efficient Turkish aviation infrastructure.
The Effect of Trade Openness on Income Inequality Selected Latin American Countries
The importance of trade openness has increased after 1990s, too many countries adopted more trade open policies to improve their economies and to improve their population's living standards. At the same period, the importance of the inequality among people has also increased which was and still a topic of interest. The aim of this study is to find out the impact of trade openness on income inequality within five countries of Latin America. In other words, does trade openness have a statistically significant effect on income inequality or not? The results of the study showed that trade openness had a statistically significant negative effect on income inequality. Moreover, the unemployment had a statistically significant negative effect on income inequality while the ideology of the government had also a statistically significant effect on income inequality with a positive effect. At last, the inflation had no a statistically significant effect on income inequality. Keywords: Trade openness, Income inequality, Heckscher-Ohlin theory, Globalization, and the Ideology of government
Household consumption pattern: Empirical evidence from Nigerian survey
ABSTRACT: This research paper examines the household consumption pattern: empirical evidence from the Nigerian living standard survey using general household survey conducted by the National Bureau of Statistics. We attempted to identify these determinants within the framework of an economic model, using two separate data – post-planting and post-harvest data sets generated from surveys in 2012 employing the robust Quantile Regression technique. Our analysis and finding provides evidence that heteroskedasticity is a natural phenomenon in the household consumption pattern since the families in the survey are from diverse backgrounds. We represented income with a proxy variable; total expenditure alongside with the second explanatory variable; household size and both play significant roles in the household consumption pattern. Recommendations to improve and build upon existing agricultural techniques and styles were made. This is inspired by the important role that agricultural sector plays in any economy, which determines to a large extent, the flexibility of that economic system to meet future requirements of being productive, efficient and competitive. It is hoped that policy suggestions there in will help make the Nigerian agricultural sector highly improved to provide for the needs of its citizens and also to face challenges amidst global competition. Keywords: Household, Quantile Regression, Nigerian Living Standard Survey. …………………………………………………………………………………………………………………………………………………………………………………………………………
The Impact of Economic Sanctions on Women’s Economic Rights in Case of Iran
Economic sanctions are one of the political tools that one country or group of countries, applies in other countries for putting them under pressure because of a variety of political and social issues. Most of the studies tried to measure the impact of sanctions on different economic sectors or on the wellbeing of the society (e.g. Neuenkirch and Fneumeier, 2014; Peksen, 2011). There are very few of them investigating the gender impact of the sanctions (e.g. Drury and Peksen, 2012). Previous studies on the impact of economic sanctions show that the overall impacts of economic sanctions are negative. The aim of this paper is to investigate the effect of economic sanctions on women’s economic rights in Iran. The study will cover the years from 1990 to 2013. To investigate the effect of economic sanctions on women’s economic rights; female labor participation rate; as an index measurement of women’s economic rights, regressed on economic sanctions (size), GDP per capita, and economic cost of sanctions. Results indicate that economic sanction has negative impact on women’s economic rights. Keywords: economic sanctions, Iran, women’s economic rights
The Impact of the Presence of Natural Gas Pipeline on House Prices: Evidence from 5 Northern States in the US
In this study, we focused on explaining the relationship between house pricing and natural gas pipeline. Using a quarterly frequency dataset, we focus our analysis on the selected 5 northern states in the US over the time span of 1991-2015 and also included some other control variables like Natural gas consumption by residential sector, population, Heating and Cooling degree days. Since house pricing is not normally distributed, we employed quantile regression, concentrating on fixed effect quantile estimate. Our empirical analyses reveal that natural gas pipeline has no significant impact in determining the variability in house pricing and the results further explain that the fixed effect statistic of the natural gas pipeline inflow is insignificant across quantiles. Furthermore, this study reveals that Population is highly significant across all quantiles, having a positive impact on house pricing. The significance and impact of the rest of the control variable are further discussed in the study. Finally, our result presents that natural gas pipeline does not have any significant impact on housing value, and this result can be adopted and used across all other regions and countries.
House Price Effect on Consumption: an MSTVAR Approach for Three OECD Countries
ABSTRACT: House prices and their effect on aggregate economy has always been a matter of interest for economists and policy makers. Especially, in recent years, after U.S. mortgage crisis many researches were conducted to study this effect to evaluate its magnitude and importance. Several theories are supporting the idea that there is a spillover from housing to other parts of economies, like consumer’s expenditure theory. In this study the effect of changes in house prices on aggregate economy was examined by a nonlinear model, Logistic Smooth Transition Autoregressive model for US, Germany and UK quarterly data from 1970 to 2011. Keywords: House prices, Nonlinearities Time Series, LSTVAR, Consumption. ……………………………………………………………………………………………………………………………………………………………………………………………………………………
Effect of Exchange Rate Changes on Export Performance in Turkey
In this study we examined the relationship between exchange rate changes and export performance in Turkey. The study uses time series data from mid 1980s, the years Turkey started to use flexible exchange rate and export-based growth, and ends at 2009, the year Turkish export reach a significant place in the world’s exports. In empirical analysis, the study uses bound testing and autoregressive distributed lag (ARDL) approach to model the dynamic relationship between the exports and its determinants. The short-run and long-run causality among the variables in the model is determined based on the estimated ARDL models. The empirical results show that the real effective exchange rate coefficient is insignificant. Therefore depreciation of real exchange rate in Turkey does not cause a substantial increase in export volume in longrun. We find that the recent export boom in Turkey is determined by wages, productivity and world demand, rather than exchange rate changes
Migration issues: Turkey and the European Union
ABSTRACT: The purpose of this study is to clarify issues surrounding migration from Turkey to the European Union (EU). After 1960s, Turkey was one of those developing countries sending temporary workers to the developed countries in Europe, mostly to Germany. There is a fear that if Turkey were given admission to the EU there will be a massive migration flow from Turkey to the other member countries of the EU, especially to Germany because of strong network effects already existing. Both empirical and theoretical research methodologies were utilised in this study. The empirical part of the study consists of two different applications. One is the application of a rationality approach to explain migrant’s decision based on exploitation of all known information affecting the future net present value of the earnings. Second is the application of a simple time series model developed by Hatton. The aim is to capture the effects of both short and long term variables on migration flows from Turkey to Germany. The theoretical part of the study develops a theoretical framework for the migration decision that takes into consideration the impact on uncertainty of some of the important economic and social variables that are addressed by the EU membership and institutions. It emphasizes future expectations of living conditions and the level of uncertainty associated with them as a key variable in making migration decisions. The recommendations which are developed in this thesis suggest that not the accession of Turkey to the EU but the rejection of Turkey’s EU membership will increase uncertainty for the future economic and social prospects in Turkey stimulating the current level of migration. Keywords: Accession, European Union, Germany, Migration, Turkey. ……………………………………………………………………………………………………………………………………………………………………………………………………………………
Analyzing the Impact of Oil Price Movements on the Economic Activity of Hungary
This paper focuses on the investigation of both theoretical and empirical comprehension of the relationship between oil price movements and economic activity for a net crude oil importing country, Hungary, as a case study. Sample period for this research spans from 15th January 2000 to 15th February 2019. The sample period accounts for notable episodes in economic activity which may be linked with oil price falls or shocks (increases). To examine this relationship, we use monthly data on Brent oil price and Hungarian industrial production index to proxy its economic activity. So as to take into account the changes in the state of the economy we employ a regime switching approach, particularly the Markov switching model (MS) using two regimes, otherwise known as states. After rigorous empirical analysis, using the Markov-switching model (MS), we found that a link exists between changes in oil-prices and economic activity. Although, the effect of an oil price shock does not immediately lead to changes in economic growth, it unfolds after the fourth quarter. This is logical because supply contracts could delay the effect of such oil shock from affecting economic growth. Furthermore, we investigated if there is any asymmetric oil-price effect on the economic activity of Hungary. To analyze if such an effect exists, we employ Mork’s positive and negative oil price specification and Hamilton’s net oil price index (NOPI). The results from our investigation imply that positive and negative changes in the price of oil do not have same impact in Hungary’s economic growth. Although Mork’s specification implies that oil-price decline would propel growth in the economy of Hungary, this impact is lesser than the decrease associated when there is an oil price increase. Keywords: economic growth, oil price shock, asymmetric effect, Markov-switching model.
Impact of Food Availability on Economic Growth and Child Mortality: A Cross Country Comparative Analysis
The aim of this study is to examine the impact of food availability on economic growth and child mortality; especially within food insecure African countries where child mortality is high and economic growth is considered as the highest hurdle to overcome. This study made use of both empirical and statistical tools to achieve its objective. The empirical aspect consists of two parts. First, Solow growth model was used to explore the impact of food security on economic growth within 124 countries, including food insecure African countries, for the period 1970-2007; the result posits that food security has a positive impact on economic growth in all the 124 countries and it has even greater impact on economic growth within food insecure African countries. Second, this study examined the impact of food security on child mortality (infant mortality and under-five mortality), using a dynamic panel data analysis for 114 countries for the period 1995-2009 by considering a wide range of controlled variables such as income, social indicators and policy variables. The result suggests that food security has a negative impact on child mortality for all countries and even more impact on child mortality within food insecure African countries. Therefore, based on the findings of this study; it is recommended that an increase in food security is indeed a positive policy option, particularly within food insecure African countries, since it not only enhances economic growth but also ensures a decrease in child mortality within these countries. Keywords: African Dummy, Economic Growth, Food Crisis, Food Availability, Africa.
Human Development and Economic Growth: An Empirical Analysis from the Nigerian Economy (1970-2011)
ABSTRACT: This study investigates the long run relationship between human development and economic growth in Nigeria between 1970 and 2011 through the application of Johansen Cointegration technique and Vector Error Correction Methodology. The origin of the human development index can be traced back to the work of an Indian economist Amartya Sen (1990) and a Pakistani economist Mahbub ul Haq (1995). They identified three major components for measuring human development level namely education, health and income. Our cointegration analysis suggests a long run relationship between these variables and economic growth. The findings also show that the greatest proportion of the variations in the real GDP can be attributed to the shocks in educational component among other identified human development components in the study. Though there are mixed evidences on the impact of income inequality on economic growth, our findings suggest that increasing income inequality and high mortality rate have a significant negative effect on the real GDP in the case of Nigerian economy. Keywords: human development, economic growth, cointegration, principal component analysis (PCA). …………………………………………………………………………………………………………………………
Macroeconomic Factors Affecting the Diffusion of Genetically Modified Crops Technology
Genetic modified crop technology is one of the world subject today especially because of food security. The Food and Agricultural Organization (FAO) has food security as one of the most pressing problem found in the world due to the unexpected increase in the world population. Therefore discoveries were made on how to improve on the food security of the world and reduce hunger in the world. One of the solutions was first of all the green revolution which began in India .This revolution helped to improve on the food supply in India and reduced hunger in India as well. Following this revolution was now the genetic modified crop technology which helped to fight against pest and some insects which could destroy some crops. Also some genetic modified cops could grow in some desert areas like in Sub Sahara areas were because of the dryness and harsh weather some crops couldn’t adapt. Due to the advantages discovered from using the genetic modified crop technology, many countries there decided to adopt this technology. The question is therefore why the spread of this technology faster in some countries than other counties? The study tries to develop and test a model which tries to explain the uneven diffusion of genetic modified crop technology across countries. We used mostly macroeconomic factors as our independent variables such as openness to trade, credit availability, GDP per capita, government size, growth rate and inflation. Genetic modified crop land size is our dependent variable. Also we used 10 countries and nine years (2004 -2012) with the help of panel data in our regression. However, the results shows some macroeconomics factors such as credit availability, government size, growth rate were significant in explaining the uneven diffusion of genetically modified crop technology. Keywords: Genetic modified crop technology, Government size, credit availability, openness to trade ,growth rate ,inflation , GDP per capita ,Food security.
Examining the Effects of Remittances, Labor Productivity and Trade on Real Effective Exchange Rate: Case of Turkey
Financial and economic development of a country is a crucial matter for every nation. There are various factors and elements that carry a major role in this regard and the literature shows numerous variables that are regarded as vital for this improvement. However, most studies examined countries in regions that are relatively far from the Middle East and Especially, Turkey. Hence, the current research entails a number of influential factors that have been noted to be significant for improving real effective exchange rate of the country, especially in the long-term. It is assumed that changes in Remittances, Labor Productivity, Trade (Openness) could impact on the changes in Real Effective Exchange Rate in the context of Turkey. These factors are remittances, labor productivity, and trade openness. It is important to note that while these factors have been under examination since early ages of research on econometric variables, the literature lacks consensus upon findings, particularly, empirical evidence. Thus, the current research aims to provide a better understanding of underlying effects and linkages among these variables. Data (2000-2017) from central bank of Turkey that was made public is used as well as indicators of OECD. Modern tools and analytical approaches have been undertaken to examine the relationships between the included factors and measures have been derived from the extant literature to ensure the reliability and validity of the results. All hypotheses of the research have been supported through data analysis. It can be said that increased remittances have a positive effect on a country’s real effective exchange rate in long-term. Increased trade openness was found to be negatively associated with REER. This is due to the fact that trade openness leads to increased price of domestic goods for other nations. Labor productivity is positively related with REER as Turkey exhibits high productivity in its labor, which further impacts its economic state in terms of effectiveness of its exchange rate. The findings of this research are aimed to contribute to the literature as well as practical approach towards analyzing and understanding connections among the aforementioned variables. Keywords: Real Effective Exchange Rate, Remittance, Labor Productivity, Trade Openness, Turkey, Economics.
Forecasting Energy Prices Using Data Mining Methods
Energy prices have been playing an increasingly significant role in the world economy since all elements involved in this area are considered as a major input for the production. The energy prices as it affect economic variables in the world, is influenced by economic activities of great countries. Indicatively, oil prices which are a major energy index globally are affected by economic activities of great countries, and when such activities are on the decrease, the economy of the industrial countries slips into recession. The energy market is a complex market which does not follow the random walk process. There are many reasons behind the complexity of the energy market such as political situation, etc. Therefore prediction of this type of market is a difficult task. This study aims to investigate, model and forecast the whole US energy market as an important energy market in the world using different machine learning methods. Besides that, the effect of the US inflation on the volatility of the energy market has as well examined. Keywords: Forecasting, Neural Networks, US Energy Market, LPPL Models, Data mining methods
The Electricity Economics of Solar Powered Electricity Generation for Augmenting Grid Electricity Supply and Rural Electrification
This study aims to assess the economic feasibility of introducing solar photovoltaic (PV) facilities in capital constrained African countries. This is carried out in the context of the falling prices and costs of the solar PV technology. The economic analyses are done comparing solar PV technology with the low-carbon fossil fuel technologies such as combined cycle (CC), and diesel power plants in terms of their economic net present values (ENPV) and environmental impacts. The economic analyses are carried for both on-grid and off-grid applications of solar PV technology. The feasibility of off-grid solar PV systems in sub-Saharan Africa (SSA) is analysed focusing on five major issues: cost-effectiveness, affordability, financing, environmental impact, and poverty alleviation. Solar PV power systems are found to be an extremely costly source of electricity for the rural poor in SSA. It is estimated that it will take at least 16.8 years for solar PV systems to become competitive with conventional small diesel generators. Moreover, the cost of reducing CO2 emissions through solar PV electrification is far in excess of the estimated marginal economic cost of CO2. In this context, investing in thermal plants powered by heavy fuel oil (HFO) would be two times as effective in reducing GHG as the same value of investment in solar PV plants. The results show that ENPV is negative for solar PV plant, whereas it is a large positive value for the thermal plants. Even if solar investment costs fall as anticipated, in such a situation without subsidies it will take 9 to 28 years of continuous decline before solar generation technology will become cost-effective for many electric utilities in Africa. Given the current costs of solar PV plants and the falling prices of solar PV systems, it is not advisable for such electric utilities in Africa to invest in this technology (unless subsidized from abroad) until the solar PV plants become competitive with thermal plants. If unsubsidized, it is the relatively poor consumers of Africa who will pay for these inefficient technological choices. Keywords: Solar PV, Electricity Generation, Africa, Greenhouse Gas Mitigation, Cost-Benefit Analysis.
Institutional Quality, Bilateral Trade and Global Value Chains in Africa
The importance of trade and institutions as drivers of economic growth and development has been established in both theoretical and empirical literature. Moreover, global value chains (GVC) propels substantial expansion in international trade across the globe over the last two decades. However, the institutions-GVC link and institutions-bilateral trade nexus in Africa suffers complete neglect in international trade research. This is despite the dismal performance of the continent in institutional quality, bilateral trade and GVC participation. Therefore, this thesis evaluates the effect of institutional quality on bilateral trade and GVC participation in Africa. In the first part, Poisson Pseudo Maximum Likelihood with High-Dimensional Fixed Effects estimator (PPMLHDFE) is applied to estimate Structural Gravity Model for the evaluation of the impact of both political and economic institutions on bilateral exports, imports and aggregate trade. A sample of 37 Sub-Sahara African countries with 124 of their trading partners for the period 2000-2018 was used for the analysis. The second part investigates the impact of institutions on backward, forward and total GVC participation as well as GVC position (upstreamness) in Africa using system-GMM estimator for a sample of 47 African countries over the period 2000-2018. The findings reveal that both political and economic institutions are significant determinants of bilateral trade and GVC participation in Africa. However, the popular submission of previous studies that institutions generally have positive impact on international trade does not apply in this case. The effects of the institutional factors are heterogeneous depending on the components of institutional quality, bilateral trade, GVC participation and income groups of the countries. Thus, this thesis offers appropriate policy recommendations on the appropriate institutional framework to adopt for the improvement of bilateral trade and GVC participation in the continent. Keywords: Institutional quality, bilateral trade, global value chains, Africa.
Reconsidering the Consumption and Income Dynamic in the United Kingdom with the Dual Adjustment Approach
This study attempts to analyse the relationship between household consumption expenditure and income from 1970 to 2020 in United Kingdom. We used the EngleGranger Cointegration Analysis and the Dual Adjustment Approach to investigate the co-movements of consumption and expenditure. Our results provide evidence on the existence of co-trending between household expenditure and income levels. Further, we found evidence for singular adjustment and against dual adjustment in the UK for the given period. That is, we found negligible difference between the effects of permanent and transitory income on household expenditure. Our findings suggest that Dynamic Keynesian Consumption Function may be valid for the UK. However, there is also evidence on the weak version of Permanent Income Hypothesis and hence there is room to research further for weak version of Permanent Income Hypothesis to provide a stronger theoretical explanation. Our findings lend support for monetary and fiscal interventions in macroeconomic policy making. Keywords: Household Consumption Expenditure, Income, Cointegration, Dual Adjustment, Permanent Income Hypothesis, United Kingdom
Forecasting US home prices with artificial neural networks and fuzzy methods combination and single forecasts
ABSTRACT: Recent studies have shown that there is a link between the housing market and economic activity. Also, they suggest that house-price fluctuations lead to real activity, inflation, or both. Therefore the existence of good model to forecast is very crucial for policy makers. The main objective of this thesis is to forecast the housing price indices for US and four Census regions of the US, namely, Northeast, South, Midwest and West by using relevant time series techniques. The purpose is to forecast out-of-sample period, from 2001:1 to 2010:5 according to the monthly data covering the in-sample period from 1968:1 to 2000:12 by using four advanced valuation method artificial neural networks and fuzzy methods multi layer perception (MLP), nonlinear autoregressive neural network (NAR), adaptive Neuro-fuzzy inference systems (ANFIS) and genetic algorithm (GA) as well as the forecast combination method. Also, the 24-step-ahead price indices will be predicted covering 2010:6-2012:6 period. The result of this study showed that both MLP and NAR separately had better answer in all parts of the data (US and four census regions) and they could have better forecast accuracy. Similarly, the results of ANFIS have a better forecast power especially in the initial steps than MLP and NAR. The results of this research also posits that both the neural network (MLP and NAR) and ANFIS have a suitable ability to model and forecast especially when there is a non- linear relationship between the data .On the other hand the results of the GA (as a linear model) in all parts of the data were not desirable. The results also showed that the nonlinear models like neural networks are better at longer horizons while the GA (as a linear model) is better at short horizons. Keywords: Forecasting, Neural Networks, US and Census Housing Price Indexes, Adaptive Neuro Fuzzy Inference Systems (ANFIS), Genetic Algorithm. …………………………………………………………………………………………………………………………………………………………………………………………………………
Impact of Investment Incentives on Employment in TRNC
After 1974, North of Cyprus became a unique country, and the markets in the country faced various obstacles due to its international unrecognition and controversial property regime. TRNC governments have developed various incentive programs to eliminate market failures, increase investment attractiveness and eliminate geopolitical problems. The Investment Incentives Law (47/2000), which is operated under the State Planning Organisation, is the most comprehensive and widely used of the implemented programmes. Although a priority sector has not been determined within the scope of this law, the main beneficiary sectors are tourism and industry. The Law provides investors with various tax breaks and exemptions, as well as land allocation, subsidized loans, and other exemptions. This study examines the relationship between investment incentives given in Turkish Republic of Northern Cyprus since 2002 and employment in the country. The main research point of the study is to what extent investment incentives affect domestic employment and sectoral employment. In line with the results obtained, it has been concluded that investment incentives given to the industrial sector affect domestic employment, while tourism investment incentives affect more of foreign employment. In addition, industrial investment incentives positively affect employment in the industry sector and service sector investment incentives positively affect employment in the services sector. It has also been determined that industrial investments affect employment with a lag of one year and tourism investments with a lag of two years. Keywords: Investment, Incentives, Employment, Northern Cyprus
Financial Development and the Shadow Economy: Evidence from South Africa
South Africa is one of the fast-developing nations in African continent. Financial sector development is observed to be faster and wide spread compared to other countries in Africa. But the level of shadow economy is still a problem in this country. The research investigates the links between financial development and shadow economy in South Africa for the period of 1970-2009. Financial development data is obtained from the World Bank Economic Indicators and South African Reserve Bank whereas shadow economy data is obtained from Elgin and Öztunalı (2012). Time series econometrics is employed for the analysis of the case. The results are indicative for other African countries.
Impact of Inflation on Economic Growth: Case Study of Nigeria (1970-2013)
ABSTRACT: This study investigates the impact of inflation on economic growth of Nigeria. Typically, this relationship has been analyzed using simple correlations and deterministic models. In this analysis, a tri-variate vector autoregressive (VAR) model is used, incorporating unemployment rate into the framework for analysis, we capture the policy trade-off between managing inflation at a low rate and targeting low unemployment as described by the Phillip curve hypothesis. After checking the series for unit root, we identified that all the variables are stationary at first difference, that is I~(1). In the model, one cointegrating vector that describes the long run interaction of these variables is also estimated. In addition, we estimate the vector error correction model and the result indicates there is convergence among the variables in the long run and that takes about 5 consecutive years. The dynamics of the relationship within the system suggest that there is a one-period temporary shock to consumer price level, which shows that there is a slow positive short run contemporaneous impact on the real GDP of Nigeria. However, this dissipates into a negative and permanent shock after 5-6years. This conforms to the neo-classical theory of sticky prices and short run economic disequilibrium. Keywords: Inflation, Economic Growth, Vector Error Correction, Cointegration, granger Causality and Nigeria. …………………………………………………………………………………………………………………………