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Wagner's Law: Empirical Evidence for China and Taiwan
Cbiung-Ju Huang*
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This paper tests Wagner's Law for China and Taiwan, using annual time series data covering the period 1979-2002. To estimate the long-run relationship between government spending and income, we use a robust estimation method known as the Bounds Test based on Unrestricted Error Correction Model (UECM) estimation (Pesaran et al., 2001). Empirical results from the Bounds Test indicate that there exists no long-run relationship between government spending and income in China and Taiwan. Furthermore, Toda and Yamamoto's (1995) Granger-causality t9st results also show that Wagner's Law does not hold for Ghina and Taiwan over this same period.
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Does Asian Financial Crisis Change
Price
Co-Movements in. East Asia
Chino-Yi Chang* ,
Ching-Fu Chen and **
and
I-Yuan Chuang***
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Along with the increasing extent of global economic integration, the form and magnitude of the linkages between international capital markets is an issue of great importance to examine. In this paper, we analyze the linkages between Japan and other countries in East Asia and examine the impact of the 1997 Asian financial crisis on the linkages using both the Johansen and Juselius cointegration method and the Granger fractional cointegration method. The result reveals that a significant fractional cointegration relationship exists after the crisis while no such evidence is supported through Johansen and Juselius cointegration method. The result suggests the linkages between Japan and other sample countries become closer and the Granger fractional cointegration method can capture the price co-movements between markets better than the Johansen and Juselius integer cointegration method.
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Cost Efficiency and Returns to Scale in
Indian
Commercial Banks in the Post
Reform Period :
A Frontier Function
Approach
G. Ramathilagam*
and
Ms. S. Preethi**
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This article attempts to evaluate the cost efficiency of Indian commercial banks in the post reform period using the framework of a translog cost frontier function and a distribution free approach to drive the bank specific levels of efficiency. Using the data of 1992-2001 it found that the mean level of cost efficiency was 53 percent showing that the banks could reduce their costs by 47 percent to produce the same output bundle that they had been producing in 2001. In the post reform period the banks appeared to have improved their cost efficiency by 10 percent. It calls upon the banks to undertake a cost audit to find out ways and means by which they could improve the utilization of their resources. It rejects the popular notion that the banks are over staffed.
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Applied Hybrid GARCH Model to Forecast
the Stock Market Volatility
Chin-Tsai Lin
and
Yi-Hsien Wang*
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This study presents a hybrid model that combines the grey forecasting model with the GARCH to improve the variance forecasting ability in variance as compared to the traditional GARCH. Owing to the true underlying volatility process not being observed, a rang-based measure of ex post volatility is employed as a proxy for the unobserable volatility process in evaluating the forecasting ability. Overall, the results demonstrate that the hybrid model can enhance the one-period-ahead volatility forecasting ability of the traditional GARCH.
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Cointegration, Causality and Wagner's Law A
Test for Nigeria, 1970-2003
Omo Aregbeyen*
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This paper examines the validity of Wagner's Law (the tendency for public expenditure to grow relative to national income) against the contending Keynesian proposition (that it is the changes in public expenditure that trigger that of national income) using Nigerian data over the period 1970-2003. Two variants of the models for investigating the Wagner's Law were tested. The first relates total public expenditure to national income, while the second relates non-transfer public expenditure to national income. Deploying recent econometric advances of cointegration and causality techniques, we found a undirectional causality from national income to total public expenditure i.e. a support for Wagner's Law. There is bi-directional causality between non-transfer public expenditure and national income. But, the causality from national income to non-transfer public expenditure was found to be stronger than the reversal direction following variance decomposition analysis. This therefore confirms the validity of the Wagner's Law. |
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India and Pakistan : Macro Economy,
Trade and Potentials
Satish Verma*
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Two divergent views, one favouring boost in Indo-Pak trade relations and the other against it are dominant in the literature on bilateral trade between the two nations. The former view is highly optimistic about the economic benefits that will flow to both the countries whereas the latter a pessimistic view emphasising that balance of trade vis-il-vis India is already heavily loaded against Pakistan. Nevertheless, in this era of globalisation, the former view seems more realistic whereas the latter is less prudent. Both the economies have exhibited robust growth particularly in the recent past and can share each other's prosperities and opportunity by further softening bilateral trade relations. Of course, both the nations have lowered tariff barriers, but several non-tariff barriers choking trade between the two nations are still in place. It is argued in this paper that both the governments need to rise to occasion so as to exploit voluminous bilateral trade potentials that exist in these nations. |
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Seasonality, Cointegration and Error-
Correction : Some
Results Using
Taiwanese Monetary Data
Muzafar Shah Habibullah*
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Despite the increasing interest in testing for seasonality in macroeconomic series among the researchers, most of the existing studies are mainly confined to the developed nation. Therefore, there is an imperative need to conduct a similar s,udy to investigate the seasonal behaviour of macroeconomic time series of the developing economics. Thus, the primary aim of this paper is to complement the existing literature of testing for seasonability in macroeconomic time series of a developing country-Taiwan. In this paper, Taiwan's income and money series were tested for seasonal unit roots and cointegration, and subsequently a seasonal error-correction models was also estimated. Our results indicate that income and money series exhibit seasonal unit roots. Further, the error-correction models suggest that income and money in Taiwan are cointegrated not only at the zero (long-rim) frequency but also at the biannual and annual frequencies. This implies that when using quarterly data for Taiwan's income and money series, the relationship between the two should be appropriately modelled using a seasonal error-correction framework. |
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Employment Elasticity and Determinants
of Women's Work Participation
in Rural India
Tarujyoti Buragohain*
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The domination of the primary sector in growth of GDP has been steadily diminishing while the tertiary sector has been gaining ascendancy through structural adjustment in India. Primary sector absorbs more than half of the total labour force whereas the tertiary sector absorbs only one fourth of the total labour force in the economy. In this paper an attempt has been made to estimate trend growth rate of employment and GDP by using trend growth curve. Employment elasticity has been estimated to decern the labour productivity among different sector of the economy. It is found that the employment elasticity with respect to GDP is highest in the agricultural sector and lowest in the secondary sector. The higher the elasticity the lower is the labour productivity which also implies more employment in that particular sector.
The work participation among women is much higher in rural than urban areas. In rural India more women are employed in agricultural sector as a wage labourer which may be one of reasons for low labour productivity in agricultural sector. Landlessness, high female illiteracy and the presence of a large number of STs and SCs in the rural population have a direct impact on female work participation.
A linear multi-variate model has been used to ascertain the possible reasons for the high rates of female work participation ill rural areas |
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Industrial Policy and Performance : A Total
Factor Productivity Analysis of the
Indian Manufacturing Sector
Savita Taneja* , J. C. Pant**
and
N. K. Taneja***
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This paper examines the trends in growth and productivity of the Indian manufacturing sector over tile period 1973-74 to 1997-98 and explores the variations therein. The analysis of the results reveals that industrial policy framework consisting of discretionary controls on domestic and foreign dimensions of tile manufacturing sector constricted the dynamic impulses that could have resulted from tile functioning markets, and it was largely responsible for low rate of growth of total factor productivity during tile pre-liberalisation period from 1973-74 to 1985-86. On the other hand. tile deregulation of the manufacturing sector from mid 1980s has resulted in significant gains in productivity caused by tile market determined more efficient allocation of resources. These measures aimed at relaxation of restriction on tile entry of private firms have introduced competition both domestically, and through imports of manufactured goods, capital and technology. These policies have resulted in an improved allocation of resources directed by signals provided by the functioning market mechanism. This has reduced wasteful allocation, leading to a higher total factor productivity growth.
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Patents and Poor Countries' Access to
Drugs : With Special Reference to India
SudhakarPanda*
and
Sikta Pati**
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Agreement on Trade Related Intellectual Property Rights (TRIPS) is an important part of the World Trade Organisation (WTO). Negotiated during the 1986-94 Uruguay Round of world talks TRIPS include the following Intellectual Property Rights (IPRS)
(i) |
Copyrights and Related Rights. |
(ii) |
Patents |
(iii) |
'trade Marks |
(iv) |
Industrial Designs of Integrated Circuits |
(v) |
Geographical Indications, and |
(vi) |
Protection of Undisclosed Information. |
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