“The Three Evils”: Inflation, Poverty and Unemployment’s Shadow on Economic Progress—A Novel Exploration from the Asymmetric Technique

Rehman, Abdul; Cismaṣ, Laura Mariana; Milin, Ioana Anda

doi:10.3390/su14148642

Cited by 15 publications

(7 citation statements)

References 44 publications

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“…Specifically, this impact amplifies with greater Government Effectiveness (GE), better Control of Corruption (CC), better Regulatory Quality (RQ), more promoted Rule of Law (RL), and a higher level of Voice and Accountability (VA). These results tend to confirm some recent studies showing the harmful effects of bad governance on growth and sustainable development, suggesting adopting policies to improve the institutional quality in developing countries [36][37][38].…”

Section: Impact On U Csupporting

confidence: 87%

Sustainable Employment in Developing and Emerging Countries: Testing Augmented Okun’s Law in Light of Institutional Quality

Raies

2023

Sustainability

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This article is motivated by the recent debate raised on Okun’s Law regarding the divergence of the magnitude of Okun’s coefficient across countries and time horizons, its asymmetry and non-linearity, and the methodological issues associated with the estimate of this law. We tested the proposition that institutional quality—as measured by governance indicators—can explain this divergence and non-linearity. We estimated an augmented version of Okun’s Law showing the non-linear responsiveness of unemployment to fluctuations in GDP in the presence of institutional quality in a sample of 88 developing and emerging countries over the 1985–2019 period. Estimates are run using the 3sls regressor. We found evidence confirming that the responsiveness of unemployment to changes in output is all the more remarkable in countries with stronger institutions. We show that improving the institutional environment—as proxied by Government Effectiveness (GE), Control of Corruption (CC), Regulatory Quality (RQ), the Rule of Law (RL), and Voice and Accountability (VA)—is as important as increased economic growth in the strategy of reducing unemployment and reaching full employment in these countries, which is one of the 17 Sustainable Development Goals (SDGs) issued by the United Nations.

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Section: Impact On U Csupporting

confidence: 87%

Sustainable Employment in Developing and Emerging Countries: Testing Augmented Okun’s Law in Light of Institutional Quality

Raies

2023

Sustainability

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“…Table 4 presents the estimation of the ARDL of Equation 2 based on the Akaike Information Criterion (AIC) ( Note that the insignificant and incorrect expected sign variables are not reported in the table). There is a long-run relationship between economic growth and inflation in Ind onesia, Singapore, Thailand, and the Philippines, except Malaysia; this result does not vary from the recent studies (see (Karahan & Colak, 2020;Rehman, Cismas, & Milin, 2022;Sinha, 2022)). A long-run relationship is detected between economic growth and interest rates in all countries, consistent with recent studies (see (Njie & Badjie, 2021;Oroud et al, 2023)).…”

Section: Resultssupporting

confidence: 49%

Economic growth and the matters of inflation and unemployment: Evidence from ASEAN-5

Tee,

Gan,

Hadi

et al. 2024

5002

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The purpose of this study is to examine the relationship between economic growth, inflation, and unemployment. One notable feature of empirical research is the rarity of studies that examine the effects of unemployment and inflation on economic growth in different economic environments, despite the large number of studies that look into these two variables. The study also incorporates interest rates and exchange rates as control variables. This study employs time series data spanning from 1994 to 2020 for selected 5 countries of the Association of Southeast Asian Nations (ASEAN), namely Indonesia, Malaysia, Singapore, Thailand, and the Philippines, under diverse economic conditions. The analysis utilises the autoregressive distributed lag (ARDL) method to examine the relationships between economic growth and its determinants. The empirical results of the study reveal: (1) Economic growth benefits from reducing inflation, interest rates, and exchange rates, underscoring their positive impact on development; and (2) Elevated unemployment rates hinder economic growth. These findings provide policy implications for policymakers in managing inflation, unemployment, interest rates, and exchange rates to foster sustained economic development.

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“…Olamide et al (2022) examined the effects of exchange rate volatility and inflation on economic growth within the Southern African Development Community (SADC) region from 2000 to 2018, showing that both exchange rate instability and inflation negatively impact economic growth in the region. Rehman et al (2022) applied the NARDL technique to uncover both short-run and long-run dynamics, revealing that inflation and poverty have adverse linkages to economic growth in Pakistan. As noticed, these models have attracted considerable attention in the literature due to their ability to reveal complex or intricate relationships that traditional econometric models can miss.…”

Section: A Brief Literature Reviewmentioning

confidence: 99%

On the Asymmetric Relation between Inflation and Growth in Mexico: A NARDL Approach

Trejo-García,

Valencia-Romero,

Soto-Rosales

et al. 2024

Economies

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The effects of various geopolitical tensions, conflicts between countries and the global post-pandemic COVID-19 have caused an acceleration in the price level in many countries around the world. This research focuses on Mexico since its monetary policy has created intricate interactions between inflation and growth in the short and long term, maintaining recently one of the highest real interest rates in Latin America (on average 5.75% vs. the US 2.3%). This paper examines the asymmetric link between the National Consumer Price Index and the Global Economic Activity Index in Mexico during the period 1994–2023. To do this, a Nonlinear Autoregressive Distributed Delay (NARDL) model is used with monthly data, which will allow the relationship between both variables to be more adequately investigated. The main empirical finding is that upward or downward shocks to the consumer price index have caused different effects in magnitude and sign on economic growth over time. Finally, several reasonable, practical, and feasible recommendations are provided for the design of the monetary policy considering non-linear effects.

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“The Three Evils”: Inflation, Poverty and Unemployment’s Shadow on Economic Progress—A Novel Exploration from the Asymmetric Technique

Cited by 15 publications

References 44 publications

Sustainable Employment in Developing and Emerging Countries: Testing Augmented Okun’s Law in Light of Institutional Quality

Sustainable Employment in Developing and Emerging Countries: Testing Augmented Okun’s Law in Light of Institutional Quality

Economic growth and the matters of inflation and unemployment: Evidence from ASEAN-5

On the Asymmetric Relation between Inflation and Growth in Mexico: A NARDL Approach

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