nach oben

Empirical Economics

Erschienen in:

22.05.2018

The nexus between key macroeconomic determinants and economic growth in Zambia: a dynamic multivariate Granger causality linkage

verfasst von: Themba G. Chirwa, Nicholas M. Odhiambo

Erschienen in: Empirical Economics | Ausgabe 1/2019

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

This study investigates the nexus between key macroeconomic determinants and economic growth in Zambia by employing the Autoregressive Distributed Lag model to test for Granger causality covering the period 1970–2015. The empirical results reveal that there are three distinct Granger causality hypotheses that exist in Zambia related to economic growth. The dominant hypothesis is the feedback hypothesis between investment, population growth, foreign aid and economic growth both in the short- and long-run; between real exchange rate, trade openness and economic growth in the short-run; and between government consumption, inflation and economic growth in the long-run. The second is the supply-leading hypothesis that runs from government consumption, and inflation to economic growth in the short-run; and from real exchange rate, and trade openness to economic growth in the long-run. Lastly, the neutrality hypothesis holds between human capital and economic growth in the short-run. These results have significant policy implications for the Zambian economy. They imply that the authorities should focus on promoting economic incentives that encourage the growth of real GDP per capita and investment, improve the quality of human capital, trade reforms, population control, macroeconomic stability, and the effectiveness of foreign aid.

Vorheriger Artikel Tax evasion, tax monitoring expenses and economic growth: an empirical analysis in OECD countries

Nächster Artikel On the wage–productivity causal relationship

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

The study employs Eviews 9.5 for unit root tests and Microfit 5.01 to conduct multivariate Granger causality tests.

Abu-Bader S, Abu-Qarn AS (2003) Government expenditures, military spending and economic growth: causality evidence from Egypt, Israel, and Syria. J Policy Model 25:567–583. https://doi.org/10.1016/S0161-8938(03)00057-7 CrossRef

Acikgoz S, Mert M (2014) Sources of growth revisited: the importance of the nature of technological progress. J Appl Econ 17(1):31–62CrossRef

Adam C, Bevan D, McBrady M (1993a) Macroeconomic performance in Zambia 1991–1993 part I: a review of the rights accumulation programme 1991–93. CSAE, University of Oxford, Mimeo

Adam C, Bevan D, McBrady M (1993b) Macroeconomic performance in Zambia 1991–1993 part II: the fiscal implications of stabilization and liberalization measures. CSAE, University of Oxford, Mimeo

Afonso A, Jalles JT (2014) Causality for the government budget and economic growth. Appl Econ Lett 21(17):1198–1201. https://doi.org/10.1080/13504851.2014.916383 CrossRef

Aghion P, Howitt P (1992) A model of growth through creative destruction. Econometrica 60(2):323–351. https://doi.org/10.3386/w3223 CrossRef

Ahmed AD (2012) Debt burden, military spending and growth in Sub-Saharan Africa: a dynamic panel data analysis. Def Peace Econ 23(5):485–506. https://doi.org/10.1080/10242694.2011.627163 CrossRef

Alfaz M, Rehman HU, Farooq MS, Sarwar K (2011) Education and economic growth in Pakistan: a cointegration and causality analysis. Int J Educ Res 50:321–335CrossRef

Al-Yousif YK (2008) Education expenditure and economic growth: some empirical evidence from the GCC countries. J Dev Areas 42(1):69–80CrossRef

Andersson P, Bigsten A, Persson H (2000) Foreign aid, debt and growth in Zambia. Research Report No. 112. Nordiska Afrikainstitutet, Uppsala. http://www.diva-portal.org/smash/get/diva2:249001/FULLTEXT01.pdf. Accessed on 3 May 2014

Aron J, Elbadawi IA (1992) Parallel markets, the foreign exchange auction and exchange rate unification in Zambia, Country Economics Department. WPS 909, May. http://documents.worldbank.org/curated/en/247631468781166139/. Accessed 3 May 2014

Awokuse TO (2007) Causality between exports, imports and economic growth: evidence from transition economies. Econ Lett 94:389–395. https://doi.org/10.1016/j.econlet.2006.08.025 CrossRef

Awokuse TO (2008) Trade openness and economic growth: is growth export-led or import-led? Appl Econ 40(2):161–173. https://doi.org/10.1080/00036840600749490 CrossRef

Ayo OS, Ifeakachukwu NP, Ditimi A (2011) A trivariate causality test among economic growth, government expenditure and inflation rate: evidence from Nigeria. J World Econ Rev 6(2):189–199

Balassa B (1964) The purchasing-power parity doctrine: a reappraisal. J Polit Econ 72(6):584–596. https://doi.org/10.1086/258965 CrossRef

Barro RJ (2003) Determinants of economic growth in a panel of countries. Ann Econ Finance 4(2):231–274

Barro RJ, Lee JW (1994) Sources of economic growth. In: Carnegie-Rochester conference series on public policy, vol 40, pp 1–46

Bassanini A, Scarpetta S, Hemmings P (2001) Economic growth: the role of policies and institutions. Panel data evidence from OECD countries. Economics Department Working Papers No., vol 283, pp 1–70. http://dx.doi.org/10.1787/722675213381

Bernanke BS, Gurkaynak RS (2001) Is growth exogenous? Taking Mankiw, Romer and Weil seriously. NBER Macroecon Ann 16:11–57. https://doi.org/10.1086/654431 CrossRef

Blomstrom M, Lipsey RE, Zejan M (1996) Is fixed investment the key to economic growth? Q J Econ 111(1):269–276CrossRef

Bojanic AN (2012) The impact of financial development and trade on the economic growth of Bolivia. J Appl Econ 15(1):51–70. https://doi.org/10.1016/S1514-0326(12)60003-8 CrossRef

Borensztein E, De Gregorio J, Lee JW (1998) How does foreign investment affect growth? J Int Econ 45:115–135. https://doi.org/10.1016/S0022-1996(97)00033-0 CrossRef

Bull B, Jerve AM, Sigvaldsen E (2006) The World Bank’s and IMF’s use of conditionality to encourage privatisation and liberalization: current issues and practices. In: Oslo conditionality conference, November. https://www.duo.uio.no/bitstream/handle/10852/32692/Bull.pdf. Accessed 15 July 2015

Chandra R (2004) Government size and economic growth: an investigation of causality in India. Indian Econ Rev 39(2):295–314

Chenery HB, Strout AM (1966) Foreign assistance and economic development. Am Econ Rev 56(4):679–733

Chirwa TG, Odhiambo NM (2016a) Macroeconomic determinants of economic growth: a review of international literature. South East Eur J Econ Bus 11(2):33–47. https://doi.org/10.1515/jeb-2016-0009 CrossRef

Chirwa TG, Odhiambo NM (2016b) Macroeconomic policy reform and economic growth in Zambia. Euroeconomica 35(2):156–166

Chirwa TG, Odhiambo NM (2017) Sources of economic growth in Zambia: an empirical investigation. Glob Bus Rev 18(2):275–290. https://doi.org/10.1177/0972150916668449 CrossRef

Ciccone A, Jarocinski M (2010) Determinants of economic growth: will data tell? Am Econ J Macroecon 2(4):222–246CrossRef

Corbo V, Fischer S, Webb SB (eds) (1992) Adjustment lending revisited: policies to restore growth. In: A world bank symposium. The World Bank, Washington, DC. http://documents.worldbank.org/curated/en/761181468739238754/pdf/multi-page.pdf. Accessed 27 Sept 2015

Darrat AF, Al-Yousif YK (1999) On the long-run relationship between population and economic growth: some time series evidence for developing countries. East Econ J 25(3):301–313

Dawson PJ, Tiffin R (1998) Is there a long-run relationship between population growth and living standards? The case of India. J Dev Stud 34(5):149–156. https://doi.org/10.1080/00220389808422540 CrossRef

Dawson PJ, Tiffin R (1999) Is there a long-run relationship between ODA and GDP? The case of India. Appl Econ Lett 6(5):275–277. https://doi.org/10.1080/135048599353212 CrossRef

De Vita G, Trachanas E (2016) Nonlinear causality between crude oil price and exchange rate: a comparative study of China and India—a failed replication (negative Type 1 and Type 2). Energy Econ 56:150–160. https://doi.org/10.1016/j.eneco.2016.03.014 CrossRef

Dhawan U, Biswal B (1999) Re-examining export-led growth hypothesis: a multivariate cointegration analysis for India. Appl Econ 31(4):525–530. https://doi.org/10.1080/000368499324246 CrossRef

Dickey DA, Fuller WA (1979) Distribution of the estimators for autoregressive time series with a unit root. J Am Stat Assoc 74(366):427–431CrossRef

Elbadawi IA, Kaltani L, Soto R (2012) Aid, real exchange rate misalignment and economic growth in Sub-Saharan Africa. World Dev 40(4):681–700. https://doi.org/10.1016/j.worlddev.2011.09.012 CrossRef

Elliott G, Rothenberg TJ, Stock JH (1996) Efficient tests for an autoregressive unit root. Econometrica 64(4):813–836CrossRef

Engle RF, Granger CWJ (1987) Co-integration and error-correction: representation, estimation, and testing. Econometrica 55(2):251–276CrossRef

Fischer S (1993) The role of macroeconomic factors in growth. J Monet Econ 32(3):485–512. https://doi.org/10.1016/0304-3932(93)90027-D CrossRef

Giles JA (1994) Another look at the evidence on foreign aid led economic growth. Appl Econ Lett 1(11):194–199. https://doi.org/10.1080/135048594357862 CrossRef

Gluzmann PA, Levy-Yeyati E, Sturzenegger F (2012) Exchange rate undervaluation and economic growth: Diaz Alejandro (1965) revisited. Econ Lett 117:666–672CrossRef

Grossman GM, Helpman E (1991) Quality ladders in the theory of growth. Rev Econ Stud 58(1):43–61CrossRef

Hartwig J (2010) Is health capital formation good for long-term economic growth? Panel Granger-causality evidence for OECD countries. J Macroecon 32:314–325. https://doi.org/10.1016/j.jmacro.2009.06.003 CrossRef

Hasan MS (2002) The long-run relationship between population growth and per capita income in Bangladesh. Bangladesh Dev Stud 28(3):65–84

Hasan MS (2010) The long-run relationship between population and per capita income growth in China. J Policy Model 32:355–372. https://doi.org/10.1016/j.jpolmod.2009.09.005 CrossRef

Hatemi A (2002) Export performance and economic growth nexus in Japan: a bootstrap approach. Jpn World Econ 14:25–33. https://doi.org/10.1016/S0922-1425(01)00071-8 CrossRef

Herzer D, Klasen S, Lehmann FN (2008) In search of FDI-led growth in developing countries: the way forward. Econ Model 25:793–810. https://doi.org/10.1016/j.econmod.2007.11.005 CrossRef

Hirnissa M, Habibullah M, Baharom A (2009) Military expenditure and economic growth in 5 Asian countries. J Sustain Dev 2(2):192–202CrossRef

Hou H, Cheng SY (2010) The roles of stock market in the finance-growth nexus: time series cointegration and causality evidence from Taiwan. Appl Financ Econ 20(12):975–981. https://doi.org/10.1080/09603101003724331 CrossRef

Hutchinson M, Singh N (1992) Exports, non-exports and externalities: a Granger causality approach. Int Econ J 6:79–94. https://doi.org/10.1080/10168739200000013 CrossRef

Hye QMA, Wizarat S, Lau WY (2013) Trade-led growth hypothesis: an empirical analysis of South Asian countries. Econ Model 35:654–660. https://doi.org/10.1016/j.econmod.2013.07.040 CrossRef

Ito T, Isard P, Symannsky S (1999) Economic growth and real exchange rate: an overview of the Balassa–Samuelson hypothesis in Asia. Natl Bur Econ Res 7:109–132

Jaoul M (2004) Higher education, causality and growth: a comparison of France and Germany before the Second World War, compare. J Comp Int Educ 34(1):117–133. https://doi.org/10.1080/0305792032000180505 CrossRef

Jorgenson D, Fraumeni BM (1989) The accumulation of human and nonhuman capita, 1948–84. Natl Bur Econ Res, 227–286. http://www.nber.org/chapters/c8121.pdf. Accessed 21 Mar 2015

Kapuria-Foreman V (1995) Population and growth causality in developing countries. J Dev Areas 29(4):531–540

Keynes JM (1936) The general theory of employment, interest and money. Macmillan, London

Knight M, Loayza N, Villanueva D (1993) Testing the neoclassical theory of economic growth: a panel data approach. Staff Pap (Int Monet Fund) 40(3):512–541CrossRef

Konya L (2006) Exports and growth: Granger causality analysis on OECD countries with a panel data approach. Econ Model 23:978–992. https://doi.org/10.1016/j.econmod.2006.04.008 CrossRef

Lean HH, Smyth R (2010) Multivariate Granger causality between electricity generation, exports, prices and GDP in Malaysia. Energy 35:3640–3648. https://doi.org/10.1016/j.energy.2010.05.008 CrossRef

Liu X, Burridge P, Sinclair PJN (2002) Relationships between economic growth, foreign direct investment and trade: evidence from China. Appl Econ 34:1433–1440. https://doi.org/10.1080/00036840110100835 CrossRef

Lucas RE Jr (1988) On the mechanics of economic development. J Monet Econ 22:3–42. https://doi.org/10.1016/0304-3932(88)90168-7 CrossRef

Mah JS (2010) Foreign direct investment inflows and economic growth in China. J Policy Model 32:155–158. https://doi.org/10.1016/j.jpolmod.2009.09.001 CrossRef

Mahadevan R, Suardi S (2008) A dynamic analysis of the impact of uncertainty on import and/or export-led growth: the experience of Japan and the Asian tigers. Jpn World Econ 20:155–174. https://doi.org/10.1016/j.japwor.2006.10.001 CrossRef

Malthus T (1798) An essay on the principle of population, chap. V. Oxford world’s classics reprint, pp 39–45. http://www.esp.org/books/malthus/population/malthus.pdf. Accessed 23 Feb 2015

Mankiw NG, Romer D, Weil DN (1992) A contribution to the empirics of economic growth. Q J Econ 107(2):407–437CrossRef

Mankiw NG, Phelps ES, Romer PM (1995) The growth of nations. Brook Pap Econ Act 1995(1):275–326CrossRef

Mosley P (1980) Aid, savings and growth revisited. Oxford Bull Econ Stat 42(1):79–95. https://doi.org/10.1111/j.1468-0084.1980.mp42002002.x CrossRef

Mosley P, Hudson J, Horrell S (1987) Aid, the public sector and the market in less developed countries. Econ J 97(387):616–641CrossRef

Mulligan CB, Sala-i-Martin X (1997) A labour-income based measure of the value of human capital: an application to the states in the United States. Jpn World Econ 9(2):159–191. https://doi.org/10.1016/S0922-1425(96)00236-8 CrossRef

Mungule KO (2004) The determinants of the real exchange rate in Zambia. AERC Research Paper 146, African Economic Research Consortium, Nairobi, December

Mushtaq K (2006) Population growth and economic development. Lahore J Econ 11(2):71–77CrossRef

Narayan PK (2005) The savings and investment nexus from China: evidence from co-integration tests. Appl Econ 37(17):1979–1990. https://doi.org/10.1080/00036840500278103 CrossRef

Nguyen TT, Wang K (2010) Causality between housing returns, inflation and economic growth with endogenous breaks. J Chin Econ Bus Stud 8(1):95–115. https://doi.org/10.1080/14765280903488397 CrossRef

Odhiambo NM (2009) Finance-growth-poverty nexus in South Africa: a dynamic causal linkage. J Socio Econ 38(2):320–325. https://doi.org/10.1016/j.socec.2008.12.006 CrossRef

Odhiambo NM (2013) Financial systems and economic growth in South Africa: a dynamic complementarity test. Int Rev Appl Econ 28(1):83–101. https://doi.org/10.1080/02692171.2013.828681 CrossRef

Perron P (1990) Testing for a unit-root in a time series with a changing mean. J Bus Econ Stat 8(2):153–162

Pesaran M, Shin Y (1999) An autoregressive distributed lag modelling approach to cointegration analysis. In: Strom S (ed) Chapter 11, econometrics and economic theory in the 20th century: the Ragnar Frisch centennial symposium. Cambridge University Press, Cambridge, pp 371–413CrossRef

Pesaran MH, Shin Y, Smith RJ (2001) Bounds testing approaches to the analysis of level relationships. J Appl Econom 16(3):289–326. https://doi.org/10.1002/jae.616 CrossRef

Pradhan R, Arvin M (2015) Foreign aid, economic growth, FDI, and trade openness in lower middle-income countries: a dynamic panel data analysis. In: Arvin M, Lew B (eds) Handbook on the economics of foreign aid. Edward Elgar, Cheltenham, pp 232–254CrossRef

Pradhan RP, Arvin MB, Bahmani S (2015) Causal nexus between economic growth, inflation, and stock market development: the case of OECD countries. Glob Finance J 27:98–111. https://doi.org/10.1016/j.gfj.2015.04.006 CrossRef

Puente-Ajovin M, Sanso-Navarro M (2015) Granger causality between debt and growth: evidence from OECD countries. Int Rev Econ Finance 35:66–77. https://doi.org/10.1016/j.iref.2014.09.007 CrossRef

Qin D, Cagas MA, Quising P, He X (2006) How much does investment drive economic growth in China? J Policy Model 28(7):751–774. https://doi.org/10.1016/j.jpolmod.2006.02.004 CrossRef

Reizman RG, Whiteman CH, Summers PM (1996) The engine of growth or its handmaiden? Empir Econ 2(1):77–110CrossRef

Republic of Zambia (2011) Sixth National Development Plan 2011–2015. Ministry of Finance and National Planning, January. http://siteresources.worldbank.org/INTZAMBIA/Resources/SNDP_Final_Draft__20_01_2011.pdf. Accessed 11 May 2015

Rodrik D (2008) The real exchange rate and economic growth. Brook Pap Econ Act 2008(Fall 2008):365–412

Samuelson PA (1964) Theoretical notes on trade problems. Rev Econ Stat 46(2):145–154CrossRef

Sato S, Fukushige M (2011) The North Korean economy: escape from import-led growth. J ASEAN Econ 22:76–83CrossRef

Shan J (2002) A VAR approach to the economics of FDI in China. Appl Econ 7:885–893. https://doi.org/10.1080/00036840110058941 CrossRef

Solow RM (1956) A contribution to the theory of economic growth. Quart J Econ 70(1):65–94CrossRef

Srinivasan P (2013) Causality between public expenditure and economic growth: the Indian case. Int J Econ Manag 7(2):335–347

Tang S, Selvanathan E, Selvanathan S (2008) Foreign direct investment, domestic investment and economic growth in China: a time series analysis. World Econ 31:1292–1309. https://doi.org/10.1111/j.1467-9701.2008.01129.x CrossRef

Tekin RB (2012) Development aid, openness to trade and economic growth in least developed countries: bootstrap panel Granger causality analysis. Procedia Soc Behav Sci 62:716–721. https://doi.org/10.1016/j.sbspro.2012.09.121 CrossRef

Temple J (1999) The new growth evidence. J Econ Lit 37:112–156CrossRef

Tsen WH (2006) Granger causality tests among openness to international trade, human capital accumulation and economic growth in China: 1952–1999. Int Econ J 20(3):285–302. https://doi.org/10.1080/10168730600879356 CrossRef

Tsen WH, Furuoka F (2005) The relationship between population and economic growth in Asian economies. ASEAN Econ Bull 22(3):314–330CrossRef

UNESCO Institute of Statistics, Education (full dataset) (2017). http://data.uis.unesco.org/Index.aspx?DataSetCode=EDULIT_DS&lang=en#. Accessed on 1 Aug 2017

Wolde-Rufael Y (2009) Energy consumption and economic growth: the experience of African countries revisited. Energy Econ 31:217–224. https://doi.org/10.1016/j.eneco.2008.11.005 CrossRef

World Bank (1990) Adjustment lending policies for sustainable growth. Policy and research series. World Bank, Washington, DC. http://documents.worldbank.org/curated/en/708661468764724192/pdf/multi-page.pdf. Accessed on 1 Sept 2015

World Bank (1993) East Asian miracle: economic growth and public policy. Oxford University Press, Oxford. http://documents.worldbank.org/curated/en/975081468244550798/pdf/multi-page.pdf. Accessed on 1 Sept 2015

World Bank (2017a) Commodity price data (pink sheet) 2017. www.worldbank.org. Accessed on 1 Aug 2017

World Bank (2017b) World development indicators 2017. www.worldbank.org. Accessed on 1 Aug 2017

Yalta AY (2013) Revisiting the FDI-led growth hypothesis: the case of China. Econ Model 31:335–343. https://doi.org/10.1016/j.econmod.2012.11.030 CrossRef

Titel: The nexus between key macroeconomic determinants and economic growth in Zambia: a dynamic multivariate Granger causality linkage
verfasst von: Themba G. Chirwa
Nicholas M. Odhiambo
Publikationsdatum: 22.05.2018
Verlag: Springer Berlin Heidelberg
Erschienen in: Empirical Economics / Ausgabe 1/2019
Print ISSN: 0377-7332
Elektronische ISSN: 1435-8921
DOI: https://doi.org/10.1007/s00181-018-1439-2

Springer Professional

Abstract

Bitte loggen Sie sich ein, um Zugang zu Ihrer Lizenz zu erhalten.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft"

Springer Professional "Wirtschaft+Technik"

Weitere Artikel der Ausgabe 1/2019

Infrastructure and long-run economic growth: evidence from Chinese provinces

Exploring causal relationship between Major League Baseball games and crime: a synthetic control analysis

Measuring expected time to default under stress conditions for corporate loans

Tax evasion, tax monitoring expenses and economic growth: an empirical analysis in OECD countries

Does the currency exposure affect stock returns of Chinese automobile firms?

On the wage–productivity causal relationship

Premium Partner