Jul 2026· Academia Research Journal· 0 citations· 24 references
Abstract
This paper aims at reconsidering three classical macroeconomic relationships (the Phillips curve, Okun's law and the inflation–growth nexus) in a unique empirical setting of emerging economies. The study uses an unbalanced panel of 34 emerging market economies over the period 2000-2023 using the World Bank's World Development Indicators (WDI), and estimates each of the relationships separately and together, with the inclusion of gross capital formation, trade openness, government consumption and level of financial development. The use of panel fixed-effects and two-step system generalised method of moments (GMM) estimators is used to deal with unobserved heterogeneity and dynamic endogeneity issues. The Phillips curve trade-off is statistically significant; but it is relatively small in economic terms: a one-percentage-point increase in the unemployment rate reduces the inflation rate by about 0.28 percentage points. Okun's law is found to be a very strong relationship: a one-percentage-point increase in the unemployment rate is associated with a 0.41 percentage-point decline in real GDP growth. The relationship between inflation and growth is nonlinear and a threshold model identifies the turning point as around 9.4% annual inflation, beyond which increases in inflation have a much greater impact on growth. The results point to a cautious inflation targeting policy in the emerging markets: the estimated Phillips slope implies that disinflation carries real output costs, although the sacrifice ratio itself is not calculated here and no direct comparison of disinflation costs with the advanced economies is claimed.
This paper investigates the dynamic short- and long-run effects of four budget deficit financing modes—monetary financing (seigniorage), domestic borrowing, external borrowing, and taxation—on inflation across 50 African countries over 1995—2024. Using 1,500 country-year observations, we apply cross-sectionally augmented unit root tests, Westerlund panel cointegration tests, and the Pooled Mean Group (PMG), Mean Group (MG), and Common Correlated Effects Mean Group (CCEMG) estimators, with Driscoll—Kraay standard errors and system-GMM as robustness checks. Monetary financing is the dominant long-run inflationary driver: a one percentage point rise in the seigniorage-to-GDP ratio increases log inflation by 0.682 points (p < 0.01). The nominal exchange rate is a key transmission channel (coefficient: 0.385, p < 0.001), while tax revenues exert a robust disinflationary effect (−0.348, p < 0.01). Domestic borrowing generates moderate long-run inflationary pressure (0.214, p < 0.05), and external debt effects are contingent on the exchange rate regime. CFA franc zone membership reduces the seigniorage coefficient to an insignificant 0.163, versus 0.847 (p < 0.01) for non-CFA countries. Central bank in-dependence further attenuates the seigniorageinflation nexus. These findings have direct implications for fiscal-monetary coordination and central bank institutional design in Africa.
M. Mvuyekure, F. Nimubona, S. Diop et al.· International Journal of Sci...· 0 citations
This paper examines how economic downturns and currency movements affect the quality of bank loans in Central, Eastern, and Southeastern Europe, using annual data for 14 national banking systems over 2008–2023. We estimate a bias-corrected dynamic fixed-effects model, verify inference with Driscoll–Kraay, cluster-robust, and wild cluster bootstrap procedures, run formal threshold tests, and conduct scenario simulations. Credit risk is highly persistent. The bias-corrected autoregressive coefficient of 0.944 implies a half-life of 12.0 years, although the bootstrap confidence interval of 0.601 to 1.048 does not rule out near-unit-root behavior. Exchange-rate depreciation predicts higher non-performing loan (NPL) ratios and survives both the strictest few-cluster test (p = 0.028) and a correction for euro-adoption breaks, while lower real GDP per capita growth is marginal under the same test (p = 0.060). Threshold tests that re-estimate the threshold in every bootstrap replication do not reject linearity in any of 14 configurations (minimum p-value of 0.071). Institutional quality does not measurably moderate the exchange-rate channel. A severe combined adverse scenario raises the projected NPL ratio from 6.54 to 12.32 percent over five years (90 percent interval: 8.2 to 24.6 percent). Together, the surviving channels and the disciplined null results delimit nonlinear transmission in emerging Europe.
Ivana Miklošević, Andreja Todorović, Andrija Popović· Journal of Risk and Financia...· 0 citations
Research Originality: This research is original in its examination of the impact of macroeconomic determinants on economic growth in Developing-8 countries, which accounts for cross-sectional dependence and country heterogeneity.
Research Objectives: The study aims to analyze the short-run and long-run effects of external debt, exchange rates, foreign direct investment, inflation, and balance of trade on economic growth in selected Developing-8 countries over the period 1997–2024.
Research Methods: The study employs a Cross-Sectionally Augmented ARDL model combined with the Error Correction Model by using secondary panel data from six members of the Developing-8 countries to capture dynamic relationships and long-run equilibrium, supported by unit root, cross-sectional dependence, and robustness tests.
Empirical Results: The findings indicate that external debt and exchange rates have positive short-run effects on growth, while inflation and the trade balance have negative immediate effects. Foreign domestic investment shows no significant short-run effect but becomes positive in the long run, and the error correction term confirms a stable long-run relationship.
Implications: The results suggest that policymakers should ensure sustainable external debt management, maintain exchange rate stability, enhance the effectiveness of foreign domestic investment, and control inflation to support long-term economic growth in Developing-8 countries.
JEL Classification: E31, F31, F34, O47
How to Cite:Nehe, R. L., & Suhartoko, Y. B. (2024). Macroeconomic Determinants of Economic Growth in Developing-8 Countries: Panel Cross-Sectionally Augmented ARDL. Signifikan: Jurnal Ilmu Ekonomi, 15(2), 339-354. https://doi.org/10.15408/sjie.v15i2.50607.
Robert Larson Nehe, Y. B. Suhartoko· Signifikan· 0 citations
This study examines the relationship between economic growth and unemployment in the United States by empirically reassessing Okun’s Law. Using quarterly data spanning several decades, the analysis examines whether the traditional inverse relationship between output growth and unemployment remains stable amid structural and cyclical changes. The study employs a range of econometric techniques, including baseline regression models, cointegration analysis, error correction modeling, vector autoregression, and structural break tests, to capture both short-run dynamics and long-run equilibrium relationships. The findings confirm a negative relationship between real GDP growth and changes in unemployment, consistent with Arthur Okun's original formulation. However, the results also reveal that the magnitude of this relationship is not constant over time. Evidence of structural breaks and subsample variation indicates that the responsiveness of unemployment to economic growth has weakened in recent decades, particularly following major economic disruptions. Additionally, the analysis identifies asymmetric adjustment patterns, with unemployment responding more strongly during economic downturns than during expansions. These results suggest that Okun’s Law should be interpreted as a time-varying and context-dependent relationship rather than a fixed empirical rule. The study contributes to the literature by incorporating up-to-date data and employing flexible econometric frameworks that capture evolving macroeconomic dynamics. The findings carry important implications for policy design and forecasting, underscoring the need for adaptive models that account for structural changes in the labor market.
O. Dieli, G. Osho, O. Ojumu· Journal of Empirical Studies· 0 citations
This study develops a dynamic panel econometric framework to quantify the structural impact of macroeconomic conditions on the non-performing loan (NPL) ratios of commercial banks across a panel of twenty-eight emerging market economies observed between 2010 and 2024. Addressing dynamic persistence and the endogeneity inherent in the joint determination of credit quality and macro-financial conditions, the empirical strategy combines a two-step System Generalized Method of Moments (System GMM) estimator with a Panel Autoregressive Distributed Lag (P-ARDL) error-correction specification estimated via Pooled Mean Group (PMG). The results confirm strong dynamic persistence in NPL ratios and show that real GDP growth, the unemployment rate, consumer price inflation, and the real lending rate are statistically significant macroeconomic drivers of asset-quality deterioration. Critically, the interaction between currency depreciation and the share of unhedged foreign-currency lending is found to amplify the NPL response to exchange-rate shocks, a channel of particular relevance to partially dollarized banking systems in transition economies such as Uzbekistan, where reported and risk-based measures of asset quality have been shown to diverge materially. The error-correction estimates indicate that approximately one-third of any disequilibrium between actual and long-run equilibrium NPL levels is corrected within a single year. These findings offer a structural basis for calibrating countercyclical provisioning and macroprudential buffers in emerging banking systems exposed to currency and business-cycle volatility.
Djamalov Gofir Oribjanovich· EPRA International Journal o...· 0 citations
This study examined the macroeconomic determinants of economic growth in Zambia over the
period 1990-2024 using an autoregressive distributed lag-error correction model (ARDL-ECM).
Annual secondary data were drawn from the World Development Indicators for Gross Domestic
Product (GDP), inflation, the real effective exchange rate, government expenditure, the real
interest rate, and unemployment. Augmented Dickey-Fuller tests showed that all variables were
integrated of order one, which justified the ARDL bounds-testing approach. The Schwarz
Information Criterion selected an ARDL(1,0,2,0,2,1) specification, and the bounds test
confirmed cointegration (F = 5.6746). The long-run estimates showed that the real effective
exchange rate (b = 3.4725, p = 0.0011) and government expenditure (b = 0.0847, p = .0336) were
positive and statistically significant determinants of GDP, whereas inflation, the real interest rate,
and unemployment were not statistically significant in the long run. In the short run, changes in
the real effective exchange rate, lagged changes in government expenditure, and current changes
in unemployment significantly affected GDP. The error-correction term was negative and
statistically significant (b = -0.1860, p < 0.001), implying that about 18.6% of short-run
disequilibrium was corrected each year. Diagnostic tests indicated no serial correlation, no
heteroskedasticity, normally distributed residuals, and correct functional form. The findings
suggest that Zambia's growth path has been shaped primarily by exchange-rate conditions and
the quality and persistence of fiscal activity, while labour-market disruptions matter more in the
short run than in the long run. The article recommends exchange-rate stabilisation, more
productive public spending, improved fiscal efficiency, and growth strategies that support
employment creation.
Chipego Kafunga Hachinene, Nicholus Obby Mainza· International journal of eco...· 0 citations
We use cookies to run the site and, with your consent, for analytics and to show ads.
See our Cookie Policy.
