Mukhriz Izraf Azman Aziz

Low savings rates in the economic community of West African States (Ecowas): The role of the political instability-income interaction

Abstract This paper employs PCSE, OLS and TSLS with random effects to investigate the impact of the political instabilityincome interaction on savings in ECOWAS countries during the period 1996-2012. The empirical evidence illustrates that higher political stability is associated with higher savings and income levels moderate the adverse effect of political instability on savings, indicating that the impact of political instability on savings is higher in low income ECOWAS countries, but lesser at higher levels of income. The paper recommends the promotion of political stability via increases in incomes to raise savings in the ECOWAS region.

Openness and ECOWAS Regional Trade: A Panel Cointegration Analysis Using a Gravity Model

This paper investigates the general effect of ECOWAS regional integration agreements on trade among its members, as well as the level of openness across ECOWAS. The panel dataset consists of bilateral flows of export from 15 ECOWAS countries for the period of 1983–2013, the cointegration method was used for estimation under the gravity model. Comparing the results, a negative and significant coefficient was discovered for the ECOWAS dummy variable, trade openness and financial openness, under pool ordinary least squares (POLS) estimators. Under dynamic ordinary least squares methods the coefficient of the ECOWAS dummy variable remained positive, but not significant. Trade openness was negative and significant under DOLS, while the variable remained positive and not significant under DLSDV. The financial openness variable was both negatively and positively insignificant under both. The empirical evidence indicates that there is a long term relationship inside ECOWAS, and thus, the level of openness among members impedes the level of trade flows on integration. However, the results reveal the fundamental significance of appropriate accounting for endogeneity when assessing trade policies.

The Gravity Model Approach: An Application on the Eco Was Trading Bloc

Abstract This study aims to examine bilateral trade flows across ECOWAS-15 nations with the use of a panel and cross section for the period of 1981-2013. The methodology carried out to achieve this objective involves the use of various techniques of estimation for the gravity model (Static and dynamic). More specifically, this study aims to investigate the formational impact of regional trade integration agreements on trade flows within a group of countries using the same currencies and ECOWAS at large. The main use of regional variables into gravity models is intended to determine whether RTAs lead to trade creation, or diversion. The results show the presence of a strong relationship among the factors of both RIAs and trade flows.

The South African monetary policy and inflation targeting as a nominal anchor: Does the monetary policy become more effective?

This study investigates whether the South African inflation-targeting (IT) framework has performed the role of the nominal anchor and the process through which the monetary authority determines its instrument in the economy. The study employs generalised method of moments (GMM) estimators. The results of the post-IT adoption and full sample periods are characterised by forward-looking IT rule. Furthermore, the paper uses the augmented monetary policy rule to identify the factors that determine the monetary policy instrument for South Africa. The results confirm that the South African monetary economy practised full-fledged IT principle immediately after the adoption of the IT framework and the monetary policy rule serves as a nominal anchor for the economy. The policy implication is that for South Africa to continue keeping inflation to the required single-digit target, the Reserve Bank should further strengthen the IT framework adopted in the economy.