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Monetary
Conditions Index in Singapore -- Wai-Ching
Poon, Muzafar Shah Habibullah, Ahmad Zubaidi Baharumshah
and Azali Mohamed
This
paper looks at bound test approach for cointegration analysis,
to verify the stability of Singaporean real Gross Domestic
Product (GDP), to construct the Monetary Conditions Index
(MCI) over the quarterly period 1981:1-2004:4. The bounds
test confirms a long-run equilibrium relationship between
the output and its determinants, namely short-term and long-term
interest rate, exchange rate, claims on private sector,
and share prices. Results reveal evidence of cointegration
between these variables in both short and long run. As such,
this has further verified the stability of the Singaporean
output demand function to construct the Monetary Conditions
Index (MCI), and how the Monetary Authority of Singapore
(MAS) responds to exchange rate changes and whether the
policy responses differ. The study has evidently showed
that the actual monetary stance reacts corresponding to
the MCIs.
©
2008 The Icfai University Press. All Rights Reserved.
Economic
Growth, Investment and Government Consumption in Italy:
A VAR Analysis -- Stefania
Villa
This
paper conducts a multivariate time series analysis of output
growth rate, investment and government consumption in Italy
from 1950 to 2005. The empirical results are consistent
with the prediction of the Solow growth model, while they
do not support the family of endogenous growth models, according
to which government consumption is a determinant of long-run
economic growth.
©
2008 The Icfai University Press. All Rights Reserved.
Wagner's
Law in Malaysia: A New Empirical Evidence --
Fumitaka
Furuoka
Despite
the availability of extensive research on Wagner's Law,
a systematic empirical testing of the hypothesis in the
context of developing countries, especially South-East Asian
nations, is still lacking. Thus, the current paper attempts
to reduce this gap and chooses Malaysia as a case study
to test the existence of Wagner's Law. The Malaysian Government
has been playing an increasingly important role in the country's
industrialization process as Malaysia is pursuing the target
of becoming a fully-industrialized nation by the year 2020.
This suggests that Malaysia could be an example of a developing
nation where government expenditure grows as the country
becomes wealthier. The first to notice such a tendency was
a German economist, Adolph Wagner, the author of the so-called
`Wagner's Law'. The most important empirical finding of
the present study is that there exists a long-run cointegrating
relationship and a short-runbut not long-runcausality between
economic development and government expenditure in Malaysia.
This provides an additional empirical evidence to support
the existence of Wagner's Law in the context of an Asian
developing country, such as Malaysia.
©
2008 The Icfai University Press. All Rights Reserved.
Modeling
Household Demand: An AIDS Model --
Oya
S Erdogdu
Studies
on economic crises usually focus on the supply side effects.
However, working on a country accustomed to economic crises,
this study searches for the demand side effects of economic
crises, if there are any. For this purpose, the household
expenditure is modeled by the Almost Ideal Demand System
(AIDS) and data are estimated decomposing the crisis period
into two sub-periods. The estimation results note some changes
in the cross-price elasticities of goods in question.
©
2008 The Icfai University Press. All Rights Reserved.
Financial
Market Integration in India: Conceptual and Empirical Issues
-- Alpana
Vats
The
Indian market which was known to be segmented mainly due
to regulatory and institutional barriers in the early 1990s
has been gradually liberalized and opened up for the world
economy. Various studies have been carried out to examine
the effect of liberalization on financial market integration
of the country. The present study gives a comprehensive
review of the past literature on the subject and takes stock
of the methodologies that are employed in the various studies.
A range of studies to investigate the convergence of markets
within India and also their convergence with the world markets
seem to have mixed results. Despite the mixed results, it
is observed that the financial sector reforms have been
successful in strengthening the interlinkages between the
markets.
©
2008 The Icfai University Press. All Rights Reserved.
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