Journal article
Sources of economic slowdown: A simultaneous equations approach
International Journal of Finance & Economics, Vol.27(2), pp.2549-2565
2022
Abstract
We explore the potential sources of slowdown in growth in a theoretical macroeconomic framework, from which we develop an empirical model consisting of a system of equations for the growth rate of GDP and the consumption share of GDP. Having estimated the basic model, we perform an extreme bounds analysis with a range of control variables as a robustness check on the results. In a sample of middle-income countries, an increase in the consumption ratio appears to be negatively associated with economic growth; foreign direct investment is found to be significantly associated with both economic growth and the consumption ratio. On considering sub-samples of Asian and Latin American countries, we find, in the Asian economies, that there is an inverted U-shaped relationship between the consumption ratio and economic growth while, in the Latin American economies, there is an inverted U-shaped relationship between the consumption ratio and growth but a U-shaped relationship between the government spending ratio and economic growth. In both sub-samples, the investment ratio is positively associated with growth.
Details
- Title
- Sources of economic slowdown: A simultaneous equations approach
- Authors
- Daping Zhao (Author) - Shanghai Lixin University of Accounting and FinanceSajid Anwar (Author) - University of the Sunshine Coast, Queensland, USC Business School - LegacyRobert Alexander (Corresponding Author) - University of the Sunshine Coast, Queensland, USC Business School - Legacy
- Publication details
- International Journal of Finance & Economics, Vol.27(2), pp.2549-2565
- Publisher
- John Wiley & Sons Ltd.
- DOI
- 10.1002/ijfe.2286
- ISSN
- 1099-1158
- Organisation Unit
- School of Business and Creative Industries; USC Business School - Legacy; University of the Sunshine Coast, Queensland; Indigenous and Transcultural Research Centre
- Language
- English
- Record Identifier
- 99482297502621
- Output Type
- Journal article
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