Seema Narayan

Export-Led Growth Hypothesis: Evidence from Papua New Guinea and Fiji

Purpose - This paper aims to examine the export-led growth hypothesis for Fiji and Papua New Guinea (PNG). Design/methodology/approach - The paper investigates the export-led growth hypothesis for Fiji and PNG who have been facing dismal economic growth performances over the last couple of decades. Findings - Findings of the study suggest that for Fiji there is evidence of export-led growth in the long-run, while for PNG there is evidence of export-led growth in the short-run. Originality/value - The findings of this paper have important messages for policy makers given that export sectors in both countries investigated are underdeveloped due mainly to a sustained period of political instability.

Tourism and Economic Growth: A Panel Data Analysis for Pacific Island Countries

The contribution of tourism to the economic growth of Pacific Island countries (PICs) has achieved significance in the past decade. The shift in the economic policies of the PICs from the late 1980s has been decisively away from import substitution and agriculture to urban-based manufacturing and services sectors. Tourism is the main component of the services sector in the PICs. The contribution of tourism to economic growth in Fiji, Tonga, the Solomon Islands and Papua New Guinea is expected to grow. The authors use panel data for the four PICs to test the long-run relationship between real GDP and real tourism exports. They find support for panel cointegration and the results suggest that a 1% increase in tourism exports increases GDP by 0.72% in the long run and by 0.24% in the short run.

Are exports and imports cointegrated? Evidence from 22 least developed countries

The aim of this article is to investigate whether there is a long-run relationship (cointegration) between exports and imports for 22 least developed countries (LDCs). This is an important issue, for evidence of cointegration will ensure that trade imbalances are sustainable. The article explores this issue using the bounds testing approach to cointegration. The results indicate that exports and imports are cointegrated only for six out of the 22 countries, and the coefficient on exports is less than one.

Do Remittances Induce Inflation? Fresh Evidence from Developing Countries

The goal of this article is to examine the determinants of inflation in both the short run and the long run for 54 developing countries using a panel data set covering the 1995–2004 period. Apart from the commonly used economic determinants of inflation, we model the impact of remittances and institutional variables on inflation. Using the Arellano and Bond panel dynamic estimator and the Arellano and Bover and the Blundell and Bond system generalized method of moments estimator, we find evidence that in developing countries remittances generate inflation. The effect of remittances on inflation is more pronounced in the long run. Moreover, we find that openness, debt, current account deficits, the agricultural sector, and the short-term U.S. interest rate have a positive effect on inflation. We also find that improvements in democracy reduce inflation.

Mean Reversion in Stock Prices: New Evidence from Panel Unit Root Tests

There is a large and growing literature that investigates evidence for mean reversion in stock prices. Empirically, there is no consensus as to whether stock prices are mean reverting or random walk processes at best, the results are mixed. In this paper, we provide further evidence on the mean reversion hypothesis for seventeen European countries using the Levin and Lin (1992), seemingly unrelated regression and the multivariate augmented Dickey-Fuller panel unit root tests. Our main finding is that stock prices of all seventeen European countries are characterised by a unit root, consistent with the efficient market hypothesis.

Psychological Oil Price Barrier and Firm Returns

In this paper, we investigate the psychological barrier effect induced by the oil price on firm returns when the oil price reaches US

Is there a unit root in the inflation rate? New evidence from panel data models with multiple structural breaks

100 or more per barrel. We find evidence of the negative effect of the US

Estimating Import and Export Demand Elasticities for Mauritius and South Africa

100 oil price barrier for: (a) the entire sample of 1559 firms listed on the American stock exchanges; (b) both foreign and domestic firms, with domestic firms significantly more affected; (c) the 10 different sizes of firms, with the smaller firms less affected compared to the larger firms; and (d) 17 sectors of firms, with firms in the utilities, mining, and administration sectors being the least affected.

Modelling Fiji-US Exchange Rate Volatility

In this article, we examine whether or not the inflation rate for 17 OECD countries can be modelled as a stationary process. We find that (1) conventional univariate unit root tests without any structural breaks generally reveal that the inflation rate contains a unit root; (2) the KPSS univariate test with multiple structural breaks reveals that for 10 out of 17 countries inflation is stationary; and (3) the KPSS panel unit root test reveals strong evidence for stationarity of the inflation rate for panels consisting of countries which were declared nonstationary by univariate tests.

Are Real Exchange Rates Nonlinear with a Unit Root? Evidence on PPP for Italy: A Note

In this paper, we re-estimate the import and the export demand functions for Mauritius and South Africa using time series data. We use the bounds tests for cointegration and find evidence of a long-run relationship between import demand, income and prices for both countries. Our long run elasticities reveal that domestic income and relative prices have significant effects on the import demand for both countries, with income being the most important determinant. Furthermore, we find that while South Africas export demand is not responsive to relative prices or income; for Mauritius income is statistically significant. Copyright 2010 The Authors. Australian Economic Papers 2010 Blackwell Publishing LtdsUniversity of Adelaide and Flinders University .