The Dynamic Impact of Energy Consumption on Economic Growth in Sudan: A Vector Autoregression Analysis (Published)
The purpose of this study is to analyze the dynamic effect of energy consumption and CO2 emissions on economic growth in Sudan by utilizing annual time series data spanning the period 1971- 2015. After identifying the series order of stationarity by utilizing ADF and PP unit root tests, this study makes use of a ARDL and VAR model. The reason is that ARDL is preferable method since it incorporates both short and long run in its specification and can be used even when there is a mixed integration order. A VAR is the powerful in variance decomposition and the possibility of observing long run forecast in addition to the dynamic response to shocks.the findings indicate long run relationship among the variables of interest. Particularly, the results disclose that energy consumption and CO2 emissions exert positive and significant effect on economic growth in the long run. The causality analysis of the gradual shift indicates a uni-directional relationship running from energy consumption to economic growth. The test results support energy-induced growth hypothesis, which reveals that energy use impact greatly on economic growth and energy saving and/or energy shocks negatively affect economic growth. This means that Sudan’s economy is energy-driven and cannot embark or initiate conservative energy policies and strategies compromising economic growth. with the emergence of energy supply and global warming issues and their conceivable consequences on economic performance, investigating their interrelations is thus essential, which has been neglected baselessly in the literature especially in the case of Sudan.
Keywords: ARDL, CO2, GDP, Sudan, VAR, and energy consumption
Trilemma of Macroeconomic Policy and Structural Reforms in Nigeria (Published)
Motivated by lack of consensus on the empirical validity of the Mundell-Fleming trilemma and its development effects, this paper examines the relationship between the trilemma indexes (monetary autonomy, exchange rate stability and capital mobility) and structural reforms with a focus on manufacturing and service value added in Nigeria. The ADRL was applied in addition to other econometrics tools in analyzing the data sourced from various documentary sources. The ARDL bounds test results revealed that the variables are cointegrated. This necessitated the rejection of the null hypothesis of no long run relationship. The short run result shows that lag two of monetary autonomy and contemporaneous value of exchange rate stability have significant positive relationship with manufacturing value added. Manufacturing value added increases by 7.289 percent following a unit increase in monetary autonomy index. Similarly, a unit increase in exchange rate stability triggers 1.372 percent in manufacturing value added in the short run. The long run result revealed that monetary independence exerts significant positive influence on manufacturing whereas capital mobility is negatively related to manufacturing valued added in the long run. The result further indicates the long term effects of the trilemma indexes are statistically insignificant while that of foreign reserve accumulation is found to exert significant positive impact on service value added in the long run. This is a pointer that the policy makers in Nigeria have leveraged on external reserve build-up to buffer shocks in the service sector. On the basis of the findings, it is concluded that the manufacturing sector is the channel through which the policy trilemma drives the process of structural reforms in the Nigeria. Thus, policy makers in Nigeria should allow for more managed floating exchange rate regime and ensure appreciable independence in the monetary policy operation with a view to fostering the process of structural reforms in Nigeria.
Keywords: ARDL, Manufacturing Value Added, Nigeria, Trilemma indexes, service value added
IMPACT OF FOREIGN DEBT ON ECONOMIC GROWTH IN BANGLADESH: AN ECONOMETRICS ANALYSIS (Published)
This paper tried to investigate the impact of foreign debt on growth in Bangladesh. The annual data series over the period 1972-2010 has been used. The study has been made by using the ARDL (Auto- Regressive Distributive Lag model) model to check the relationship of growth and debt. According findings there is a significant adverse effect of debt on growth in Bangladesh. In Bangladesh External debt service is a burden for its nation and it makes the GDP slows down. This study recommended that Bangladesh should find out any option of debt cancellation and must increase human development and more infrastructure development. It is also recommended that debt management should be effective and fair, and Exports, FDI and Remittances are helpful for the growth of Bangladesh.
Keywords: ARDL, Export, FDI, Remittance, cointegration test and unit Root, foreign debt