Demand following or supply leading? A panel data analysis for developed, developing, and less developed countries

Download

8.pdf

Date

2013-12-1

Author

Akıncı, Gönül Yüce
Akıncı, Merter
Yılmaz, Ömer

Metadata

Show full item record

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Item Usage Stats

274
views

107
downloads

In this paper, the linkages between financial development and economic growth in developed, developing and less developed countries are investigated using unbalanced panel cointegration and causality analysis in the period of 1980 – 2011. The results of the Pedroni cointegration analysis show the existence of cointegration relations between financial development and economic growth for whole country groups, but Kao cointegration analysis indicates the long – run relationship between the related variables for the group of less developed countries. The results of Granger causality analysis show that there is bidirectional causality relationship between financial development and economic growth for developed and developing countries. However, for less developed countries only unidirectional causal nexus is obtained running from real economic growth to financial development. This means that demand following process is valid for less developed country group.

Subject Keywords

Financial Development, Economic Growth, Panel Cointegration Test, Panel Granger Causality Test

URI

http://www2.feas.metu.edu.tr/metusd/ojs/index.php/metusd/article/view/614
https://hdl.handle.net/11511/58326

Journal

ODTÜ Gelişme Dergisi

Collections

Department of Economics, Article

Suggestions

OpenMETU
Core

Financial development and energy consumption in emerging markets: structural shifts in causal linkages Durusu Çiftçi, Dilek; Soytaş, Uğur; Nazlıoğlu, Şaban (null; 2018-11-03) This study examines dynamic causal interrelationships among financial development, energy consumption, and economic growth in the emerging markets by focusing on accounting for structural changes in causal linkages. We first employ the Toda-Yamamoto causality framework and later augment it with Fourier approximation to account for structural shifts – including gradual/smooth shifts. The empirical findings show that accounting for gradual structural shifts matter for the causal linkages between financial dev...
Real Exchange Rates and Growth: Contractionary Depreciations or Appreciations? Özmen, Erdal; YOLCU KARADAM, DUYGU (2021-01-01) This study investigates the impact of real exchange rates (RER) on growth of a large number of advanced (AE) and developing economies (DE) estimating conventional growth models augmented with global financial conditions variables. First of all, replicating Rodrik (2008) and following studies employing panel autoregressive distributed lag (PARDL) and PARDL mean group (PARDL-MG) models, we show that the expansionary depreciation findings for DE are often based on a misinterpretation of an error correction mec...
Exchange Rate Regimes and Business Cycles: An Empirical Investigation Erdem, Fatma Pinar; Özmen, Erdal (2015-11-01) This paper empirically investigates the impacts of domestic and external factors along with exchange rate regimes (ERRs) on business cycles in a large panel of advanced and emerging market economies (EME). The results for classical business cycles suggest that EME tend to experience much deeper recessions and relatively steeper expansions during almost the same duration. The probability of expansions significantly increases with ERR flexibility. Our results strongly support floating ERR for both advanced an...
Oil price, agricultural commodity prices, and the dollar: A panel cointegration and causality analysis NAZLIOĞLU, ŞABAN; Soytaş, Uğur (2012-07-01) This study examines the dynamic relationship between world oil prices and twenty four world agricultural commodity prices accounting for changes in the relative strength of US dollar in a panel setting. We employ panel cointegration and Granger causality methods for a panel of twenty four agricultural products based on monthly prices ranging from January 1980 to February 2010. The empirical results provide strong evidence on the impact of world oil price changes on agricultural commodity prices. Contrary to...
Do Stock Index Futures Affect Economic Growth? Evidence from 32 Countries Şendeniz Yüncü, İlkay; Aydoğan, Kürşat (2018-01-26) This article investigates the relationship between stock index futures markets development and economic growth using time-series methods for 32 developed and developing countries. Evidence of cointegration between stock index futures and real economy in 29 countries suggests the presence of co-movements among the variables, indicating long-run stationarity in those countries. Our findings show that there is Granger-causality from stock index futures markets development to economic growth for middle-income c...

Citation Formats

G. Y. Akıncı, M. Akıncı, and Ö. Yılmaz, “Demand following or supply leading? A panel data analysis for developed, developing, and less developed countries,” ODTÜ Gelişme Dergisi, vol. 40, no. 3, pp. 553–574, 2013, Accessed: 00, 2020. [Online]. Available: http://www2.feas.metu.edu.tr/metusd/ojs/index.php/metusd/article/view/614.