The approach of a unilateral impact of the financial sector on economic growth was invalidated by the last financial crisis which very quickly changed into a global economic crisis.
The aim of the study is the analysis of the impact of the financial sector on economic growth in the context of the growing phenomenon of financialization, which was one of the significant reasons of the financial crisis. The study was focused on presenting the growing scale of this phenomenon and analysing the impact of money supply in USD and EUR on world GDP and the GDP of the USA and the Eurozone. The following hypothesis was postulated: the growing process of financialization causes the growth of the USD and EUR supply, influencing changes in the world GDP, the GDP of the USA and the Eurozone. The study confirmed the hypothesis of the relation of the money supply with changes in economic growth. However, influencing economic growth with the money supply causes the purchasing power of business entities to decrease and causes growing debt. Furthermore, it does not contribute to the strength of the real economy. A repair of the current “system“ should not be sought for in constantly increasing macroprudential regulations, but in a return to a country’s interventionism, leading to a change in the priorities of the actions of financial institutions; mainly banks, and the supply of money based on fixed parities (gold, energy).
This study examines the impact of monetary policy on economic growth in Ukraine between 2006 and 2019. After the stationarity and co-integration tests, a vector- autoregressive model (VAM) was used to estimate the impact of monetary factors on economic growth in Ukraine. The research results show that GDP changes are largely explained by its own earlier dynamics, but in the long-run real GDP quite strongly depends on the money supply, exchange rate against euro, and basic interest rate. At the same time GDP is weakly dependent on the exchange rate against US dollar, CPI and PPI, the volume of loans to business and external debt. The authors explain their findings and compare them with several other empirical studies on the subject concerning some other countries.
This study examines the causal links between improvements in economic freedom and changes in GDP per capita of new EU members in transition in the period 2000‒2009. The empirical results suggest significant causality running from changes in monetary and fiscal freedom, trade openness, regulation of credit, labour, and business, legal structure and security of property rights, and access to sound money to movements in GDP per capita, especially in less and moderately developed CEE transition countries. Moreover, we find evidence that improvements in economic freedom are one of the main factors stimulating the convergence of these economies towards rich EU members. The evidence of causality in the opposite direction is much weaker.
The paper discusses Bayesian productivity analysis of 27 EU Member States, USA, Japan and Switzerland. Bayesian Stochastic Frontier Analysis and a two-stage structural decomposition of output growth are used to trace sources of output growth. This allows us to separate the impacts of capital accumulation, labour growth, technical progress and technical efficiency change on economic development. Since estimates of the growth components are conditioned upon model parameterisation and the underlying assumptions, a number of possible specifications are considered. The best model for decomposing output growth is chosen based on the highest marginal data density, which is calculated using adjusted harmonic mean estimator.
The purpose of this empirical study is to find the relationship between economic growth and foreign direct investment (FDI) in the Commonwealth of Independent States (CIS) and Central and Eastern European Countries (CEECs) using endogenous technological change model. First, we combine the CIS and CEECs into one group to test our hypothesis, and then we test each group separately to account for heterogeneity and draw a conclusion whether FDI is indeed a driving force of the economy. Panel data have been used from 2003 to 2014 and different panel estimation methods have been applied. Additionally, we use the Generalized Method of Moments (GMM) panel estimator to control for endogeneity problem. The present study finds that FDI is an important factor explaining economic growth in the pooled group and CEECs, although it is not significant in the case of CIS.
The mining sector played an important role in the economic growth of the developed countries with rich natural resources in the past, and in recent years, it is important for the economic growth of developing countries. Also, it is generally supported by the incentives due to the fact that mining sector causes other related sectors to grow. Incentives have been the most important economic policy instrument imposed by governments to boost economic growth in developed and developing countries. Incentives or supports given by Turkish state in order to increase the mining investments can be analyzed under two categories; incentives or supports based on the Turkish Mining Law, incentives or supports provided under the Investment Incentive Program. The effect of investment incentives applied to the mining sector in Turkey between the years of 2001 and 2017 on mining production index (MPI) and also the indirect effect of these on gross domestic product (GDP) are investigated by using Granger Causality Test and regression analysis. In this study, the data belonging to the number of investment incentive certificates received by firms operating in Mining Sector and the amount of total fixed investment were used. According to the findings obtained from this study, it has been determined that encouraging the fixed investments of the firms operating in the Mining Sector with incentives has a significant and positive impact on MPI and GDP in a short period of 1 year. H owever, the incentives applied to the mining sector did not increase the production index of the mine in parallel with the increase in the GDP.
This paper presents an empirical analysis of economic growth in respect of its components, namely input change, technological progress and changes in efficiency. In this work the Bayesian Stochastic Frontier method as well as the output change decomposition procedure, are used in order to evaluate their influence on economic growth. The use of panel data in the study allows for a detailed analysis of economic growth in a given economy and enables the search for general patterns that govern the process. The study is carried using a set of sixteen countries over the period 1995‒2005.
Changes in the size and the age structure of a population have a great impact on an economy, especially on national savings and capital flows. Poland’s population, although still relatively young when compared to other developed countries, is expected to experience accelerated ageing and decline in forthcoming decades. In this paper, we assess the effects of these processes for Polish economy. Using an open-economy OLG model with demographic shocks and a variable retirement age, we simulate dynamics of real interest rates, main macro aggregates as well as net foreign assets to GDP. We show that rapid ageing will reduce the interest rate gap between Poland and the developed countries by 1.3-2 p.p. We also document a strong positive relationship between interest rates and the retirement age and find that the decline in the interest rate in Poland is primarily driven by the surviving probability shock