Linkages between Inflation and Economic Growth in Serbia: An ARDL Bounds Testing Approach

Obradović, Saša; Šapić, Srđan; Furtula, Srđan; Lojanica, Nemanja

doi:10.5755/j01.ee.28.4.14003

Cited by 9 publications

(8 citation statements)

References 33 publications

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“…In addition to these studies, the relationship between inflation and economic growth has been hypothesized based on unilateral factors. As stated by Sapic, Obradovic [26], there is an unblemished linkage between inflation and economic growth in Serbian economy.…”

Section: Plos Onementioning

confidence: 95%

“…As per Hajria, Khardani [45], the Breusch Godfrey test for the ARDL model evaluates the correlation and thereby concerns the quality of the compatibility. According to Mohseni and Jouzaryan [46] and Sapic, Obradovic [26], Cumulative Sum (CUSUM) test is referred to check the stability of the selected method. The structural changes can be assessed by monitoring statistics and graphical illustrations perceived through CUSUM.…”

Section: Plos Onementioning

confidence: 99%

“…The stability of short and long run coefficients is analysed through CUSUM test [26]. In addition, CUSUM test ensures whether acceptable outcomes are being achieved and can be determined through stability of the ARDL model.…”

Section: Cumulative Sum For Autocorrelationmentioning

confidence: 99%

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Driving the pulse of the economy or the dilution effect: Inflation impacting economic growth

et al. 2022

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Economic growth becomes a critical component in the development of every country since it enhances living standards and other related concerns while eliminating poverty. As a developing country, Sri Lanka must place more emphasis to achieve sustainable economic growth. In addition, various factors have positive and negative impacts on economy’s growth. As such, the specific goals of any economy are to sustain long-term economic growth and low inflation. As a result, generally, high inflation is destructive for an economy and low inflation is beneficial. Therefore, it is worth investigating the impact of inflation on economic growth concerning a stable inflation level. This study examines the impact of inflation on economic growth in Sri Lanka by employing the Auto Regressive Distributed Lag model as the estimation technique. Furthermore, the findings illustrate a negative relationship between inflation and economic growth in the short run; when inflation increases by 1%, economic growth decreases by United States Dollar (USD) 3,427.94 million and long run economic growth declines by 107,263.8 million USD. Subsequently, with the current economic reality of Sri Lanka, the macroeconomic policies should be adaptable to maintain the stability of the inflation rate for a sustainable economy.

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Section: Plos Onementioning

confidence: 95%

Section: Plos Onementioning

confidence: 99%

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Driving the pulse of the economy or the dilution effect: Inflation impacting economic growth

et al. 2022

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“…Given that cointegrating relations between the variables are expected, a VEC model could be applied for the study of FDI, remittances and political stability, as well as inflation and gross fixed capital formation, involving time-series data [48]; [49]; [17]; [50]; [31]. Next, an ARDL model is performed, for the given level of integration, to shed more light on the linkages between the variables [51]; [31]; [52]; [53] which is a model to use especially when samples are rather short.…”

Section: Empirical Methodologymentioning

confidence: 99%

An empirical study of the relationship between Foreign Direct Investments, Remittances, Political Stability and Economic Growth in Greece

Bantimaroudi¹,

Golitsis²,

Mitreva³

2023

JOE

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This study attempts to shed light on the relationship between FDI, remittances, Gross Fixed Capital Formation, political stability, inflation and economic growth for the case of Greece, using time-series data of annual frequency, covering the period from 1980 to 2018; the end date is the last year before the COVID-19 and the 2022 Russian Invasion of Ukraine which caused a structural break on the data set. After establishing that the investigated variables are stationary in level or in their differences, and once the Johansen test and the residuals based approach to cointegration are employed in capturing the cointegrating relations between them, we proceed with a robust VEC model and an ARDL with cointegration bounds, depending on the level of integration of the time series, to capture both the short-run and the long-run dynamics. The overall findings of both models are jointly analyzed, revealing that according to the ARDL model, FDI and economic growth are positively related in the short-run, but negatively related in the long-run. Moreover, the model indicates a negative short-and long-run relationship between remittances and economic growth, as well as a positive link between political stability and economic growth in Greece, as expected. The negative short-run relationship between remittances and economic growth is further supported by the VECM. Finally, both the VECM and ARDL indicate that GFCF and economic growth are positively related in the short-run, while the ARDL model reveals that this relationship exists in the long-run too.

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“…Consequently, ARDL provides unbiased long-run estimators and valid t-statistics. Obradovic et al (2017) asserted that the ARDL approach to co-integration helps in identifying the co-integrating vectors, thus each of the study variables are dealt with as a single long-run relationship equation. The ARDL bounds testing approach is based on the estimation of the dynamic error correction representation of the individual variables.…”

Section: Autoregressive Distributed Lag Cointegrationmentioning

confidence: 99%

How Oil Price Changes Affect Foreign Direct Investment Inflows in South Africa? An ARDL Approach

Tala

Hlongwane

2023

IJEFI

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The study examined how oil price changes affect Foreign Direct Investment (FDI) inflow in South Africa. The study used annual quantitative data, obtained from the South African Reserve Bank (SARB) and World Bank development indicators. With the exception of real exchange rate, Augmented Dicky Fuller (ADF) and Phillips-Peron (PP) tests for stationarity indicated variables become stationary after first differencing. Stationarity test results suggested application of ARDL bounds test for cointegration. ARDL bounds test for co-integration confirms that variables of the study have long-run relationship with F-statistic of 6.59, which is higher than the lower (2.98) and upper (3.78) boundaries at least 5% level of significance. In the long - run oil prices coefficient found to have negative and significant influence in foreign direct investment inflows during 1980-2020 period. Empirical results provide practical implications for South Africa, as oil importing country can hedge crude oil price changes to maintain future quantity of crude oil to be imported. The study recommends expansion of renewable energy sources to reduce South Africa’s vulnerability to oil price fluctuations. Moreover, since oil prices are exogenously determined, setting up forward looking institutions such as sovereign wealth funds and short- term stabilization funds will be better.

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Linkages between Inflation and Economic Growth in Serbia: An ARDL Bounds Testing Approach

Cited by 9 publications

References 33 publications

Driving the pulse of the economy or the dilution effect: Inflation impacting economic growth

Driving the pulse of the economy or the dilution effect: Inflation impacting economic growth

An empirical study of the relationship between Foreign Direct Investments, Remittances, Political Stability and Economic Growth in Greece

How Oil Price Changes Affect Foreign Direct Investment Inflows in South Africa? An ARDL Approach

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