This study simultaneously tests Wagner’s law on one hand and Keynes proposition on the other hand related both government spending and output in Ivory Coast that experiencing long run economic growth and widened deficit. That challenges the country’s fiscal sustainability. With annual data from 1980 to 2020, results show that Wagner’s law holds, the elasticity of government spending to output is greater than one. There is bidirectional causality between government size and output validating Keynesian idea that public expenditure is an exogenous factor and a policy instrument for increasing national income. Wagner law and public deficit can justify Ivorian over-indebtedness.

The rapid evolution of information and communication technology (ICT) has resulted in significant transformations across a wide range of social and economic activities. As a result, the ongoing digitalization process is emerging as a critical force in determining progress and modernity. This study looks at the complex relationship between digitalization and economic growth in European Union (EU) countries from 2017 to 2022, using the Digital Economy and Society Index (DESI) issued by the European Commission. Our work employs a sophisticated panel data estimate approach and the fundamental Cobb-Douglas model and presents an empirical perspective on the relationship between digital technology and economic prosperity. Based on the fixed-effect panel estimate, our findings show a significant correlation: A 1% rise in digitalization (as measured by the DESI index) correlates with a 0.3838% impressive rise in GDP growth. This study emphasizes the need to comprehend and utilize digital technologies' revolutionary potential. It presents a solid argument for stakeholders and governments to embrace digital innovation and leverage it to achieve long-term, sustainable economic growth.

In recent years, financial inclusion has taken center stage in policy discussions regarding achieving higher growth rates and reducing poverty levels. The existing literature analyzing the relationship between financial inclusion and GDP growth mostly assumes a one-way relation from financial inclusion to GDP, often ignoring potential reverse causality. Furthermore, the literature commonly adopts a financial inclusion index, or focuses on specific indicators such as the number of bank branches, ATMs or the share of people having an account. Because financial inclusion encompasses multiple dimensions, it is important to analyze the causal linkages between different financial inclusion indicators and GDP. In this paper, we analyze the nature and the direction of the causality between GDP and a large number of financial inclusion indicators for MENA (Middle East and North Africa) countries by adopting the recently developed nonlinear and nonparametric Kernel causality approach. Our analysis suggests that financial inclusion increases as the share of women having bank accounts increases. It also increases with the share of adults with primary education having an account and the share of adults having a mobile account. We also identify the relationship between main barriers to financial inclusion and GDP, and find that affordability and having insufficient funds are associated with GDP.

I present a theoretical model and an empirical approach for jointly estimating the effectiveness of fiscal policy and the stochastic process of sovereign interest rate shocks. The theoretical model has features relevant to small open and emerging economies. Interest rate shocks affect the ability of firms to finance payroll expenses. This theoretical feature creates a propagation mechanism for interest rate shocks and affects government spending multipliers. This paper proposes a strategy for jointly estimating government spending multipliers and the interest rate shock process parameters.

Trust beneficiary protection constitutes an important legal system in the trust industry. This paper, based upon the study approach of the “Theory of Law and Finance”, establishes the trust beneficiary protection index of China. We also test the influence of trust beneficiary protection on the performance of trust companies. As indicated by our study’s results, an “inverted U-shaped” relationship exists between the degree of trust beneficiary protection and the performance of trust companies. In a period when the trust law system has not yet been well established, strengthening trust beneficiary protection could help facilitate the growth of trust company performance. However, this facilitation effect gradually diminishes as the trust law system becomes more perfect. This in turn means that, after reaching a certain peak, conferring the beneficiary with more rights of supervision and participation would cause the performance of trust companies to decline. Improving regional legal environments could also help facilitate the growth of trust company performance. In addition, this facilitation effect is subject to the influence of the nature of trust company controllers. In trust companies controlled by local state-owned capitals, we find that the facilitation effect of the improvement of regional legal environments on trust company performance is inhibited. In trust companies controlled by non-state-owned capitals, however, the facilitation effect of the improvement of regional legal environments on trust company performance is enhanced.

This paper shows mainly the following results. 1) The debt to GDP ratio cannot diverge to infinity, that is, fiscal collapse is impossible. The necessary condition for this result is that the propensity to consume from the asset is positive. 2) The divergence of the debt to GDP ratio is prevented by inflation when the interest rate on government bonds is considerably higher than the real growth rate, and the inflation rate which is sufficient to prevent divergence of the debt to GDP ratio is smaller than the interest rate on government bonds. Only an inflation rate slightly greater than the difference between the interest rate on government bonds and the sum of the real growth rate and the propensity to consume from the asset is required. This inflation is not caused by policy but occurs naturally.

Exiting literature and central banks have recently raised concerns about the ominous overlooked threat of growing global debt, and its fundamental role in financial crises and economic instability. This paper develops and models an alternative economic theory that calls for a paradigm shift from the prevailing debt-based financial economy. Through a structured literature review and conceptual analysis, the paper explores the relationship between the traditional interest-based financial economy and economic injustice and instability. The paper then through an econometric analysis of data collected from 189 countries tests its conceptualised theory advocating a gradual transition from the deb-based financial economy. The results provide three important contributions. Firstly, the results contribute to the field of economics and finance by providing a conceptual and theoretical framework for examining the interaction between the financial economy and economic equity. The paper introduces a conceptualisation of what it coins as the Equitable Optimality Economic Theory, which replaces interest rate with profit rate. Secondly, the paper extends the debate in the literature about debt theories and its impact on the financial economy by arguing that a shift towards debt-balanced and eventually debt-free financial economy provides a more equitable and stable economic system. Thirdly, the econometric modelling demonstrates that such a change would lead to improved economic growth, reduced debt levels, enhanced financial stability, and the inherent nature of profit rates provides a natural buffer against economic downturns. The study concludes by proposing a practical roadmap for this economic transition in gradual and steady approach.

The use of digital technologies like artificial intelligence, robotics, or smart devices can be expected to go hand in hand with higher productivity and lower trade costs, and, therefore, to be positively related to export activities. This paper uses firm level data for manufacturing enterprises from the 27 member countries of the European Union to shed further light on this issue by investigating the link between the digitalization intensity of a firm and extensive margins of exports. We use a new machine-learning based regression method, Kernel-Regularized Least Squares (KRLS), which effectively handles non-linear relationships in models and does not impose any restrictive assumptions for the functional form of the relation between margins of exports, digitalization intensity, and any control variables. We find that firms which use more digital technologies do more often export, do more often export to various destinations all over the world, and do export to more different destinations.

The use of cloud computing by firms can be expected to go hand in hand with higher productivity, more innovations, and lower costs, and, therefore, should be positively related to export activities. Empirical evidence on the link between cloud computing and exports, however, is missing. This paper uses firm level data for manufacturing enterprises from the 27 member countries of the European Union taken from the Flash Eurobarometer 486 survey conducted in February – May 2020 to investigate this link. Applying standard parametric econometric models and a new machine-learning estimator, Kernel-Regularized Least Squares (KRLS), we find that firms which use cloud computing do more often export, do more often export to various destinations all over the world, and do export to more different destinations. The estimated cloud computing premium for extensive margins of exports is statistically highly significant after controlling for firm size, firm age, patents, and country. Furthermore, the size of this premium can be considered to be large. Extensive margins of exports and the use of cloud computing are positively related.

The paper is motivated by the growth of the electronic payments system and its relevance in enhancing the banking industry's earnings. Consequently, the paper examines the causal relationship between the electronic payments system and the banking industry's returns in Nigeria. The paper offers some important contributions to the literature involving the use of an approach that allows for data-driven identification of the change points in the electronic payments system and the banking industry's returns nexus. The paper discovered three important findings. First, the causal relationship between the electronic payments system and the banking industry's returns in Nigeria changes with time changes. Second, there is evidence of causality between the electronic payments system and returns on assets and equity, however, the causality was more evident under the recursive window. Third, the causal relationship was more evident in some specific periods such as 2020Q4, all quarters of 2015 to 2016, and 2020 to the end of 2023. The paper recommends that policymakers should revisit and reinvigorate the specific cashless policies instituted in 2012-2016 that aided higher returns to the banking industry. Similarly, the Central Bank of Nigeria and other banking industry players should intensify efforts to encourage the use of electronic payments due to their usefulness and ability to enhance the banking industry's earnings.

The paper studies Philippine poultry data and revisits the chicken or the egg causality problem to include ducks data. Using quarterly Philippine poultry production time-series from the first quarter of 1980 to the last quarter of 2014, this research finds that chickens came from eggs, which is consistent with the earlier statistical results of Thurman and Fisher (1988), and genetics-based conclusions of Eriksson et al. (2008). However, no conclusive evidence was found using the Philippine duck and duck eggs data. The chicken or the egg conundrum demonstrates the power of Granger causality testing in answering questions of temporal ordering that has various causal applications using macroeconomic, financial, and agricultural time-series data.

I will show that if the propensity to consume from savings satisfies appropriate conditions, the debt-GDP ratio will not grow infinitely large and fiscal collapse will not occur. Using a basic macroeconomic model, with an overlapping generations model in mind, we show the following results: 1) The budget deficit including interest payments on the government bonds equals an increase in the savings from a period to the next period. 2) If the savings in the first period is positive, we need budget deficit to maintain full employment under constant prices or inflation in the later periods. 3) Under an appropriate assumption about the propensity to consume from savings, the debt-GDP ratio converges to a finite value. It does not diverge to infinity. The larger the propensity to consume from savings, the smaller the budget deficit required to achieve full employment. The larger the propensity to consume from savings, the less likely it is that the debt-GDP ratio will become large.

As governments worldwide grapple with the urgent need to mitigate climate change, understanding the nuanced relationship between fiscal targets and environmental innovation is crucial for crafting effective policy frameworks. Green technological advancement stands as the cornerstone of enterprise competitiveness, driving improvements in both economic prosperity and environmental sustainability. Government fiscal policies play a pivotal role in shaping the landscape of green transformation within enterprises, particularly through the establishment of fiscal revenue targets. Drawing upon data from prefecture-level cities and enterprise records, this study employs empirical analysis utilizing a fixed effects model and instrumental variable method. Our findings underscore the significant impact of fiscal revenue target setting on the trajectory of green technological advancement within enterprises. Specifically, the imposition of fiscal revenue growth targets exerts a dampening effect on the propensity for green technological advancement among enterprises. Notably, this disincentive is particularly pronounced among state-owned enterprises, as well as those with lower and moderate returns on capital, and those characterized by labor-intensive operations. Furthermore, our research delves into the underlying mechanisms of this inhibitory effect. We ascertain that the pressure associated with fiscal revenue growth targets hampers corporate green technological advancement by amplifying tax burdens and exacerbating financing constraints. In light of these findings, our study not only contributes to the theoretical understanding of the interplay between government fiscal policies and corporate innovation but also provides empirical evidence to inform strategies aimed at reconciling the imperative of fiscal revenue growth with the imperative of fostering green technological advancement within enterprises. In the broader context of governmental efforts to address climate change, this research underscores the importance of aligning fiscal policies with environmental objectives.

Understanding the economic trends and demographic dynamics of a country is crucial for policymakers and researchers to formulate effective strategies and policies. This study aims to examine the GDP trends and aging index dynamics in Portugal from 2011 to 2021, with a focus on regional disparities and their implications for demographic challenges. The findings highlight the relationship between regional GDP and the aging index, indicating that regions with higher GDP values tend to have a relatively younger population, while regions with lower GDP values have a relatively older population. The study contributes to the existing literature on population aging by providing insights into the demographic, economic, and social implications of an aging society. It provides valuable insights into the demographic, economic, and social implications of population aging in Portugal. The findings contribute to the existing literature and can inform policymakers and stakeholders in developing targeted strategies and policies to address the specific challenges faced by each region.

By introducing time to build, which creates a time-lag between government investment and the accumulation of productive capital, into an analysis of fiscal stimulus to the economy with financial frictions, we find that the effectiveness of fiscal policy is dampened. While the weakening effects of time to build become significantly weaker alongside with a higher fraction of government bonds allocated to leverage-constrained banks, which can be explained by a high correlation between time to build and financial frictions in both worsening balance sheet conditions of banks. Furthermore, the stimulus effects of public investment become stronger associated with shorter time-to-build period.

The study analyses the long growth rate period contribution to human development in West African Economic and Monetary Union (WAEMU) from 1996 to 2019 introducing time and institutional indicators effects analyses. Time and institutional effects both greatly improve model's diagnostics statistics. Time effects reduce growth variable coefficient and its significance, but not institutional effects. Combined effects inhibit growth contribution to human development. It appears essential to increase the resiliency of growth and the efficiency of government institutions.

We assess the impact of the Strategic Economic Plan on Singapore’s long-term GDP per capita. To our knowledge, we are the first to evaluate the effect of the 1991 plan on Singapore’s successful growth trajectory using methodologies aimed at causal identification. In other words, this article applies the Synthetic Control method and World Bank data from 1970 to 2018. We estimate an average increase of 6,641.71 US$ in Singapore’s GDP per capita. Results remain robust to placebo and leave-one-out tests and the Synthetic Difference-in-Differences method.

In his "The World’s smallest macroeconomic model” (Krugman (1999)), Paul Krugman argued that under the assumption of price rigidity, a shortage of money supply leads to underemployment or recession, so increasing money supply can eliminate underemployment and restore full employment. But, how do we increase the money supply? I will show that we need a government deficit to increase the money supply in order to restore full employment from recession. Also, I will show that in a growing economy, if people hold money, a government deficit is necessary to maintain full employment under constant price or inflation. A government deficit is not only effective in pulling the economy out of recession, it is even necessary for continued growth without inviting either recession or inflation. The government deficit in this paper represents the difference between government expenditures and government revenues. When the difference is positive, we say that the government has a deficit. This paper seeks to explore theoretically and normatively the role of government deficits in achieving and maintaining full employment in a growing economy without causing inflation, using a very simple model by Krugman.

Global distributions of net factor income from abroad (NFI) during 1990-2019 have witnessed that (1) the United States is the top one country accounting for 40% of surpluses of the global total, while a surge in China’s deficit with its GDP increase; (2) GDP growth in emerging economies has a price scissors with NFI deficits; (3) asymmetric NFI has covered up the severity of rich countries’ global arbitrages especially from emerging economies; (4) China’s economic power is exaggerated by the PPP-based GDP implemented by the World Bank. It concludes that (1) developing countries have paid for huge hidden cost for their emergence; (2) the statement of the United States suffering losses absolutely does not hold; (3) GDP is not a universal tool for measuring what matters. It suggests that (1) emerging economies countries should beware of the potential misleading of GDP on economic measurement and economic power comparison ; (2) GDP should be critiqued from the applicability perspective of economies’ types; (3) it is urgent to clarify some misjudgment and misleading concepts in the economic affairs surrounding the global value chain patterns; (4) the construction of national governance capacity in emerging economies should focus on “social infrastructure”, of which one of the important parts is an effective economic statistics system; (5) emerging economies should carry out the strategic layout of international economic statistics talents to enhance their soft powers.

As prices have grown at their fastest pace in recent times, inflation has become a key concern for the macro-policy environment. In many jurisdictions, consumer prices have typically formed the basis for price stability policies. Notwithstanding, producer prices remain an important channel and must be closely watched. We utilise data on Ghana and investigate the causal links between consumer and producer inflation and assess the necessity to include producer inflation target in the monetary policy rule. Our VECM and Granger causality analyses show that consumer and producer prices exhibit very stable long-term relationship and short-term gaps between the two tend to normalise over time. The relationship between consumer and producer prices has not been a one-sided lag structure, even though producer prices lead more than lag consumer prices. We conclude that Bank of Ghana’s monetary policy design that does not distinguish between consumer and producer inflation is less problematic at the moment.