Turkish Economic Review
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Unified Growth Theory Contradicted by the Absence of Takeoffs in the Gross Domestic Product
No full textAbstract. Data describing historical economic growth are analysed. They demonstrate convincingly that the take offs from stagnation to growth, claimed in the Unified Growth Theory, never happened. This theory is again contradicted by the same data which were used, but never properly analysed, during its formulation. The absence of the claimed takeoffs demonstrates that the postulate of the differential takeoffs is also contradicted by data. Furthermore, this analysis demonstrates that the mathematically-analysable data contradict the concept of the prolonged Malthusian stagnation, its effects on the economic growth as well as the concept of a dramatic escape from the Malthusian trap.Keywords.Historical economic growth, regimes of growth, Malthusian stagnation, takeoffs, Malthusian trap, hyperbolic growth.JEL.A10, B10, B22, F01, N10
Austerity, Cyclical Adjustment and How to use the Remaining Leeway for Expansionary Fiscal Policies Within the Current EU Fiscal Framework
No full textAbstract. Fiscal policy in the Euro area has been dominated by austerity measures implemented under the institutional setting of the 'reformed' stability and growth pact, and the even stricter 'fiscal compact' for some years. Since mid-2014 calls for a more expansionary fiscal policy to overcome the economic crisis have become more frequent. The EU-Commission in this spirit has launched the Juncker-Plan to stimulate (public) investment and is using a less strict interpretation of the Stability and Growth Pact in order to provide more fiscal leeway for countries under unfavourable economic circumstances. This paper argues that these steps do not go far enough and that indeed a truly expansionary fiscal policy in the dimension of two to three per cent of Euro area GDP for a few years is possible even within the existing institutional framework. Special emphasis is put on the method of cyclical adjustment employed by the European Commission in order to assess member states’ fiscal position and effort as well as on ways to increase public investment. It is demonstrated that even in the existing framework the leeway for a macroeconomically and socially more sensible fiscal policy using the interpretational leeway inherent in the rules could be quite substantial.Keywords. Fiscal policy, Austerity, Cyclical adjustment of public finances, Euro area.JEL. E61, E62, E65, H62, H63
Factors Influencing Female Labor Force Participation in Egypt and Germany: A Comparative Study
No full textAbstract. This paper aims to identify the major factors influencing female labor force participation (FLFP) in Egypt and Germany. On a narrow scope and given the unclear relationship between educational attainment and Egyptian FLFP, this paper seeks to examine the effect of educational attainment on the Egyptian FLFP while considering other personal and household factors. On a broader scope, the literature on FLFP illustrates that certain personal and household characteristics determine FLFP. However, the question remains, to what extent these determinants differ between Egypt and Germany. This paper attempts to shed light on understanding if and how specific demographic factors affect the Egyptian FLFP in comparison with the German FLFP. Limited dependent variable technique; Probit model is utilized to determine which factors influence FLFP in both countries. The cross sectional analysis is conducted through the use of the 2012 Egyptian Labor Market Panel Survey (ELMPS) in collaboration with Egypt’s Central Agency for Public Mobilization and Statistics (CAPMAS) and the 2012 German Socio-Economic Panel (SOEP). Findings indicate that indeed higher educational attainment increases the Egyptian female’s predicted probability of participating in the labor market. Additionally, the comparative study showed that number of factors affect FLFP in both countries, some of which has a positive influence as years of schooling and age while others with a negative impact as being a married women, living in urban areas and number of children. On the other hand some other variables impact each country differently as wealth. Additionally, it was evident that years of schooling has a higher marginal impact on Egyptian FLFP yet, age, being married and number of children have a higher marginal effect on German FLFP.Keywords. Femal labor force participation, German socio-economic panel, Egyptian labor market panel survey, Probit model.JEL. C40, C80, J10, J20, J40, J60
18th National Economics Symposium: Savings, Sustainable Growth and Technological Development
No full textAbstract. In this study, the evaluation of the 18th National Economics Symposium: Savings, Sustainable Growth and Technological Development held in Konya will be mentioned.Keywords. Sustainable growth, Technological development, Economic confidence, National Economics Symposium, Konya.JEL. E21, O30, O40
Investment and Economic Growth: An Empirical Analysis for Tanzania
No full textAbstract. This paper analyzes the causal effect between domestic private investment, public investment, foreign direct investment and economic growth in Tanzania during the 1970-2014 period. The modified neo-classical growth model is used to estimate the effect of investment on economic growth. Also, the economic growth models based on Phetsavong & Ichihashi (2012), and Le & Suruga (2005) are used to estimate the crowding out effect of public investment on domestic private investment on one hand and foreign direct investment on the other hand. In the same way, the crowding out effect of foreign direct investment on domestic private investment is estimated. A correlation test is applied to check the correlation among independent variables, and the results show that there is very low correlation suggesting that multicollinearity is not a serious problem. Moreover, the diagnostic tests including RESET regression errors specification test, Breusch-Godfrey serial correlation LM test, Jacque-Bera-normality test and white heteroskedasticity test reveal that the model has no signs of misspecification and that, the residuals are serially uncorrelated, normally distributed and homoskedastic. Broadly, the empirical results show that the domestic private investment and foreign direct investment play an important role in economic growth in Tanzania. Besides, a revealed negative, albeit weak, association between public and private investment suggests that the positive effect of domestic private investment on economic growth becomes smaller when public investment-to-GDP ratio exceeds 8-10 percent. Similarly, foreign direct investment tends to marginally reduce the impact of domestic private investment on growth. These results suggest that public investment and foreign direct investment need to be considered carefully in order to avoid a reduced positive impact of domestic private investment on growth. Domestic saving may be promoted to encourage domestic investment for economic growth.Keywords. Public investment, Domestic private investment, FDI, Crowding out effect, Economic growth.JEL. F21, F43, O40, O47
Analysing the Effect of Remittances on Rural Household in Pakistan
No full textAbstract. Rural households are more vulnerable to uncertain situations, for these uncertainty they diversify not only their resources but their income. Income receive to households is in three formats i.e. labour income, internal remittance income and external remittance income. Rural households invest for uncertain situation in future, rural households invest in assets in good time and this investment help them to tackle future uncertainty. Current paper investigates by using the data of PSLM that how remittances effect accumulation of assets, because remittances are utilise as transitory income. Results also explains that external remittances significantly affect the assets accumulation of rural households.Keywords. Assets accumulation, Rural Areas, Probit model, PSLM.JEL. C25, D10, D61, F22, F24, R20
A Multifaceted Panel Data Gravity Model Analysis of Peru’s Foreign Trade
No full textAbstract. Peru’s abundant natural resources and friendly trade policies have made the country a major economic player in both South America and the global community. Consequently, exports are playing an increasingly important role in Peru’s national economy. Indeed, growing from 13.1% as of 1994, exports now contribute approximately 21% of the GDP of Peru as of 2015.Given Peru’s growing global influence, the time is ripe for a thorough analysis of the most important factors governing its export performance. Thus, within the framework of the augmented gravity model of trade, this paper examines Peru’s export performance and attempts to identify the dominant economic factors that should be further developed to increase the value of exports. The analysis was conducted from three different aspects: (1) general economic parameters’ effect on Peru’s export value, (2) more specific analysis into a major specific trade good, copper, and (3) the impact that regional trade agreements have had on Peru’s export performance. Our panel data analysis results for each dataset revealed interesting economic trends and were consistent with the theoretical expectations of the gravity model: namely positive coefficients for economic size and negative coefficients for distance. This report’s results can be a reference for the proper direction of Peruvian economic policy so as to enhance economic growth in a sustainable direction.Keywords. Gravity model, Fixed effect, Random effect, Instrumental variables GMM regression, Exports, Copper, Panel data, Peru, Regional trade agreements.JEL. F10, F12, F40, F41
The Egyptian Electricity Market: Designing a Prudent Peak Load Pricing System
No full textAbstract. Electricity prices in Egypt have been set significantly lower than the real economic cost of its production and supply. These subsidies encourage the waste of energy and increase the fluctuation in demand, triggering a huge need of additional power generation capacity in Egypt. This dialectical paper addresses this problem by first theoretically analyzing the Egyptian electricity market and then discussing a possible peak load pricing system. According to the results, especially low income households will shift their demand from the peak period to the off peak period. A properly implemented peak load pricing system could reduce the need for power capacity expansion by significant 2000-3000 MW, accompanied by additional savings in the network transmission capacity.Keywords. Energy, Electricity, Peak load pricing, Peak demand, Off-peak demand.JEL. L51, L94, Q40
