In this paper, we subject the global fear index (GFI) for the COVID-19 pandemic to empirical scrutiny by examining its predictive power in the predictability of commodity price returns during the pandemic. One of the attractions to the index lies in its coverage as all the countries and by extension regions and territories in the world are considered in the construction of the index. Our results show evidence of a positive relationship between commodity price returns and the global fear index, confirming that commodity returns increase as COVID-19 related fear rises. By way of extension, we further establish that commodity market offers better safe-haven properties than the stock market given the negative association between GFI and the latter. Finally, the GFI series improves the forecast accuracy of the predictive model for commodity price returns and its forecast outcome outperforms the historical average (constant returns) model both for the in-sample and out-of-sample forecasts. Our results are robust to alternative measures of pandemics.
This paper seeks to achieve two objectives. First, we argued for the increase in government expenditure on education and health to examine the possibility of achieving inclusive growth. Second, financing gap model was employed to estimate the potential growth in GDP per capita that is accruable to the economy if government use natural resource rent to finance increase in expenditure of education and health. Relying on dataset for 18 SSA countries, among the results obtained showed that both government expenditures are found to be significant for explaining growth in SSA. However, augmenting health expenditure with natural resource appears to be more significant for making growth process inclusive. Also, the results of the simulation exercise indicate that increasing government expenditure on health would increase GDP per capita growth by over 3.1 %. The policy implication of this is drawn based upon the results obtained.
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