Abstract:The study reveals that there is a relationship between foreign direct investments, trade, and growth rate of per capita GDP for Bangladesh with the help of annual time series data for 1973 to 2014. The Vector Error Correction Model (VECM) analysis shows that there is a long-term relationship between these variables. To check the validity of the VECM model, we did a few post-estimation diagnostic tests, and found that the residuals of the regressions have a normal distribution and do not show any auto-correlation. The trade and foreign investment variables have a significant impact on the growth rate of GDP per capita. Because FDI and trade are two important components of economic growth in Bangladesh, it is important to frame policies that promote growth and reduce the barriers for capital flows.
This study looks at some non-conventional determinants of economic growth, with the help of the newly developed economic freedom index datasets of the Heritage Foundation/Wall Street Journal(HF/WSJ), which is a cumulative index derived from several sub-indices (trade freedom index, financial freedom, labor freedom, business and fiscal freedom index). The cumulative economic freedom index show us how open and business friendly a country is. The sub-indices show us openness across different sector of the economy, for example, the financial sector or the trade sector etc. Traditional neo-classical economic theories have explained economic growth looking at the supply of labor, capital and state of technology, with little attention being paid to institutional factors. The study presents evidence based on two panel data-sets. The first set consists of 186 countries over the period 2013, 2014 and 2015 that show institutional factors play a crucial role in economic growth. A second data-set with data for 57 countries for the period 2004-2014 also show a positive impact on the index on the growth rate of per capita GDP.
Abstract:The findings from the VECM for BBS data reveal that there is a positive and significant relationship between FD and GDPGR, supporting the Keynesian theory, while findings from the VECM for World Bank data indicate that the impact of Fiscal Deficit (FD) on GDPGR is mild but negative and significant at the 5% level. This contradicts the Keynesian theory, but is in accord with Neo-classical theory which asserts that fiscal deficits lead to a drop in the GDP.
This study seeks to assess the impact of relationship between Money Supply and Per Capita GDP Growth Rate in Bangladesh over the period 1972-2014 with a VECM model. The model is specified with three variables, namely, the percentage of Broad Money to GDP (BMGDP), the Real Interest Rate (RIR) and the Annual Per Capital GDP Growth Rate (GRGDP). Findings suggest that steady BMGDP is associated with GRGDP and money supply has important impact on the growth rate of output in the long run. The government should maintain consistency and follow "the Taylor rule" to allow money supply to increase at a steady rate keeping pace with the economic growth. Respect to such a rule will help the central bank to avoid the inefficiencies that result from execution of discretionary policy. It also helps to resist the political pressure very much prevalent in Bangladesh and often behind such discretionary policies.
Environmental pollution, especially air pollution, is an alarming issue for the public, which is extensively debated among academic scholars. During the winter heating season, “smog” has become somewhat a normal phenomenon to local residents’ livelihood in northern China. Based on the daily air pollution data of regional cities in China from 2014 to 2016, and using a regression discontinuity design (RDD), the study finds that winter heating makes the air quality worse in the northern part of China. With the start of the winter heating, it increases the Air Quality Index (AQI) by 10.4%, particulate matter smaller than 10 μm (PM10) by 9.77%, particulate matter smaller than 2.5 μm (PM2.5) by 17.25%, CO by 9.84%, NO2 by 5.23%, and SO2 by 17.1%. Furthermore, dynamic changes demonstrate that air quality has gradually improved due to a series of heating policy changes implemented by the central government in recent years. Specifically, from 2014 to 2016, major indicators measuring the air pollution decrease dramatically, such as AQI by 92.36%, PM10 by 91.24%, PM2.5 by 84.06%, CO by 70.97%, NO2 by 52.76%, and SO2 by 17.15%.
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