This study employed annual time series data and unit root tests with multiple breaks to determine the most likely times of structural breaks in major factors impacting on the trade-GDP nexus in Iran We found, inter alia, that the endogenously determined structural breaks coincided with important events in the Iranian economy, including the 1979 Islamic revolution and the outbreak of the Iraq-Iran war in 1980. By applying the Lumsdaine and Papell (1997) approach, the stationarity of the variable under investigation was examined and in the presence of structural breaks, we found that the null hypothesis of unit root could be rejected for all of the variables under analysis except one. Under such circumstances, applying the ARDL procedure was the best way of determining long run relationships. For this reason, the error correction version of the autoregressive distributed lag procedure (ARDL) was then employed to specify the short and long-term determinants of economic growth in the presence of structural breaks. The results showed that while the effects of gross capital formation and oil exports were important for the expansion of the Iranian GDP over the sample period, non-oil exports and human capital were generally less pivotal. It was also found that the speed of adjustment in the estimated models is relatively high and had the expected significant and negative sign. JEL classification numbers: C12, C22, C52.
In India, the number of metropolitan cities with a population of around 1 million people and above has increased from 35 in 2001 to 53 in 2011. Around 43% of the urban population resides in metropolitan cities.2 By 2030, the urban population of India is predicted to increase by a total of 163 million, relative to an increase in the rural population by 30.9 million (UN DESA 2014). Unplanned growth in the urban population tends to put pressure on regional/urban disparities and the rapidly increasing slum-dwelling population. In 2011-2012, the headcount ratio (HCR) based on US$ 1.90 per person per day for India is around 21.3%, and the total number of people under this poverty line is 260 million. The urban Gini index increased by nearly 5 points from 34.3 to 39.1, and the urban mean log deviation (MLD) index increased by over 6 points from 19.3 to 25.5 during 1993-1994 to 2011-2012 (World Bank 2015a, b). The figures show a rapid increase in urban poverty and inequality.
Policy makers' concerns over sub‐optimal savings rates in Australia mistakenly concentrate on symptoms rather than causes of low rates of growth in investment and productivity. A growth model of a small open economy is used to demonstrate possible interdependencies of these variables which are tested using cointegration and long‐run Granger causality techniques for the periods 1861–1900 and 1949–90. As expected, no direct long‐run relationship is found between savings and investment. However the interactions between investment and productivity growth are found to be complex and evolving, whilst savings appear to be determined residually in the growth process.
This paper responds to the unsatisfactory argument that there is no correspondence between co‐integration and the efficient market hypothesis. A law of one co‐integrating vector of prices is proposed for the exchange rate and domestic and overseas stock prices. Markets must therefore be efficient in long‐run equilibrium because no arbitrage opportunities exist. However, arbitrage activity via the disequilibrium error correction allows above‐average (risk‐adjusted) returns to be earned in the short run. The elimination of these arbitrage opportunities means that stock market inefficiency in the short run ensures stock market efficiency in the long run.
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