The paper uses different measures of financial sector development for a dynamic heterogeneous panel of 17 African countries to examine the impact of financial sector development on private savings. An innovative econometric methodology is also employed related to a series of cointegration tests within a panel. This is an important contribution since traditional panel data analysis adopted in pr...

This paper provides an estimation and testing framework to identify the source(s) of spuriousness in a large nonstationary panel. This can be determined by two non mutually exclusive causes: pooling units neglecting the presence of heterogeneity and genuine presence of I (1) errors in some of the units. The paper proposes two tests that complement a test for the null of cointegration: one test ...

This paper uses panel cointegration and error correction models to unveil the direction of long-run causality between the real product wage and labor productivity at the industry level. I use two datasets of manufacturing industries: the EU-Klems dataset covering 11 industries in 19 developed economies, and the Unido Industrial Statistics Database covering 22 industries in 30 developed and deve...

This paper focuses on the macroeconomic management of large inflows of foreign aid. It investigates the extent to which African countries have coordinated fiscal and macroeconomic responses to aid surges. In practice, we construct a panel dataset to investigate the level of aid ‘absorption’ and ‘spending’. This paper departs from the recent empirical literature by utilising better measures for ...

There is a large literature devoted to the size of the response of nominal interest rates to changes in expected inflation, the Fisher effect. The interest in the topic stems from the implications of the Fisher effect for both asset pricing models and monetary neutrality propositions. Unfortunately no consensus has been achieved concerning the Fisher effect. Part of the problem for this has bee...

The purpose of this paper is to propose a new likelihood-based panel cointegration test in the presence of a linear time trend in the data generating process. This new test is an extension of the likelihood ratio (LR) test of Saikkonen & Lütkepohl (2000) for trend-adjusted data to the panel data framework, and is called the panel SL test. The idea is first to take the average of the individual ...

This paper analyzes the public healthcare expenditure of Middle Eastern countries in relation to different exogenous explanatory variables, through a panel study involving twelve (12) Middle East countries. More specifically, the study methodology uses panel cointegration, and panel-based error correction models derived from annual data covering the period of 2000 to 2010. The empirical results...

This paper provides a selective survey of the panel macroeconometric techniques that focus on controlling the impact of “unobserved heterogeneity” across individuals and over time to obtain valid inference for “structures” that are common across individuals and over time. We consider issues of (i) estimating vector autoregressive models; (ii) testing of unit root or cointegration; (iii) statist...

Applicability of Wagner’s hypothesis to six East Asian countries is studied for a period of nearly a half-century during which their economic growth has often been termed as a “miracle”. Despite the high rates of growth in most cases, there is little indication to support the hypothesis except for Japan and possibly Korea. This finding is broadly supported by a variety of tests of cointegration...

This paper provides a selective survey of the panel macroeconometric techniques that focus on controlling the impact of “unobserved heterogeneity” across individuals and over time to obtain valid inference for “structures” that are common across individuals and over time. We consider issues of (i) estimating vector autoregressive models; (ii) testing of unit root or cointegration; (iii) statist...