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In this paper we use the Johansen and Juselius cointegration technique to examine the long-run convergence between imports and exports for a number of industrialized countries. The results indicate that there exists a long-run steady-state relationship between imports and exports for most countries in the sample. The policy implications of our findings are that the countries are not in violation of their international budget constraints and, more importantly, there is no productivity gap between the domestic economy and the rest of the world, implying a lack of permanent technological shocks to the domestic economy.

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This study uses a new Granger non-causality testing procedure developed by Toda and Yamamoto (1995) to contribute to the debate on exchange rates and stock prices in Sweden. It examines a possible causal relation between these variables in a vector autoregression (VAR) model. The results show that Granger causality is unidirectional running from stock prices to effective exchange rates. The results also reveal that an increase in Swedish stock prices is associated with an appreciation of the Swedish krona. Special attention is given to the estimation methodology and the lag choosing process.

This study examines the long-run causal relationship between government revenues and spending of the Swedish economy over the period 1722-2011. The results based on hidden cointegration technique and a modified version of the Granger non-causality test, show that there exists a long-run and asymmetric relationship between government spending and government revenues. Our estimation results can be summarized into three main empirical findings. First, the government follows a hard budget constraint and soft budget constraint strategies in the case of negative and positive shocks, respectively. Second, negative shocks to the fiscal budget are removed fairly quickly compared to positive shocks. Third, bi-directional causality between revenues and expenditures offers support in favor of the fiscal synchronization hypothesis. The policy implication is that budget deficit's reduction could be achieved through government spending cut, accompanied by contemporaneous tax controls.

This paper investigates Balassa's export-led growth hypothesis for Greece, Ireland, Mexico, Portugal and Turkey by constructing a vector autoregression (VAR) model. On the basis of the Granger non-causality procedure developed by Toda and Yamamoto (1995), the results show that export and output are causally related in the long run for Ireland, Mexico and Portugal. Our findings cannot offer support for the causality link between export and output for Greece and Turkey. Granger-causality is uni-directional, running from export growth to economic growth in Ireland and Mexico, and running from economic growth to export growth in Portugal.

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Is the way that individuals make risky financial choices, or tradeoffs over time, related to demographic characteristics? This article attempts to examine whether there is a link between demographic variables, risk aversion, and impatience using a randomly drawn sample of the population in Sweden. Based on a proportional odds model, the findings show that willingness to take financial risk depends on portfolio structure, gender, age, educational attainment, income, financial stability, financial literacy, marital status, and family size. Financial counselors are encouraged to use the variables related to financial risk tolerance discussed in this article whenever developing portfolios or in calculations that require specific information about a person’s willingness to take financial risk.