Economic Policymaking Research Articles

Examining the Influence of Renewable Energy Consumption, Technological Innovation, and Export Diversification on Economic Growth: Empirical Insights from E-7 Nations

The present research focuses on the endogenous development theory and investigates the relationships between economic growth (dependent variable) and renewable energy consumption, technological innovation, and export diversification (independent variables) in seven emerging economies known as the E-7. Previous studies have examined these factors individually but have not explored their combined impact on the E-7 economies. Therefore, this study contributes to the existing literature on the effects of renewable energy consumption, technological advancement, and export diversification on economic development. This study analyses the dynamic connections among these variables in seven selected emerging countries: Brazil, China, Indonesia, India, Mexico, Russia, and Turkey. Panel data from 1990 to 2022 are utilised, and various methodologies, including panel cointegration, the pooled mean group–autoregressive distributed lag (PMG-ARDL) estimator, and robustness tests, such as the fully modified ordinary least square and dynamic ordinary least square tests, are employed. Empirical inferences are drawn using the Dumitrescu–Hurlin panel causality (DHC) test, and the long-run relationships among the variables are validated using the Westerlund residual cointegration tests. The results from the PMG-ARDL estimator show that renewable energy consumption, technological advancement, and export diversification have a significant and positive impact on economic expansion, confirming the validity of the endogenous growth model in the E-7 countries. The control variable of the financial sector has a positive but insignificant effect on economic growth, while trade openness has a negative and significant effect. The DHC test results indicate a neutral feedback effect of renewable energy consumption on economic growth. The findings also reveal a unidirectional causal relationship between technological innovation and economic growth. Overall, these findings provide valuable insights for economic policymakers in the E-7 countries. By removing barriers to renewable energy consumption, technological innovation, and export diversification, policymakers can promote sustainable economic development.

A Case Study: Comparison of LSTM and GRU Methods for Forecasting Oil, Non-Oil, and Gas Export Values in Indonesia

This study explores the forecasting of Indonesia’s oil, non-oil, and gas export values, highlighting its critical role in supporting national economic growth. Given the inherent volatility in export values, accurate forecasting is vital for informed economic decision-making. The research employs Long Short-Term Memory (LSTM) and Gated Recurrent Unit (GRU) models, both well-regarded for their ability to handle sequential data and complex temporal patterns. Model performance was evaluated using Root Mean Square Error (RMSE) and Mean Absolute Percentage Error (MAPE). The findings indicate that although both models produced nearly identical MAPE values of 99.99% across the oil, non-oil, and gas sectors, the GRU model outperformed the LSTM model with RMSE values of 0.0655 for oil and gas exports and 0.0697 for non-oil and gas exports. Moreover, the GRU model’s forecasts align closely with data from the Central Bureau of Statistics (BPS), which reported an 11.33% decline in Indonesia’s export values by the end of 2023. These results suggest that the GRU model not only offers greater accuracy but is also applicable to other economic forecasting contexts, such as exchange rate and inflation predictions, thereby enhancing economic policy-making.

How to make sense of the crisis of the international economic system: the emergence of the Group of Thirty and the debate on inflation (1978–81)

ABSTRACT This article explores the early history of the Group of Thirty (G30, 1978), which is an economic policy body committed to the analysis and spread of policy prescriptions as regards the evolution of the international economic and monetary system after the end of Bretton Woods. In so doing, this work represents the first critical recounting of the G30ʹs early experience from a historiographic perspective. The article frames the organizational roots and the early history of the G30 within the wider economic and political context that marked the transformations of the international system between the late 1970s and the early 1980s. Moreover, this article deals with one of the most challenging policy issues that characterized the international economic policymaking at that time: the spread of high inflation rates. The emergence of sustained inflation trends in Western Europe will receive specific attention. Finally, the article discusses the relevance that social and political concerns acquired in the very conceptualization of anti-inflationary and market-oriented measures, as these were promoted by the G30ʹs affiliates between the late 1970s and the early 1980s.

How to Read Donor Development Policies: Developing Aids for Reading and the Case of Finland 1993–2023

Since the 1990s, and accelerating with the adoption of the UN Sustainable Development Goals, the goals for development aid in donor-government development policies have proliferated. Goal structures have also become complex. It is, therefore, often difficult to read a given donor’s intentions from officially declared policy: what exactly it claims being committed to accomplishing with aid in recipient countries and through what means? Furthermore, when goals and means for aid are non-transparent, it becomes more difficult to evaluate or assess donor development policies as officially promised action plans. Related to but not identical to Hall’s policy paradigm concept [Hall, P, 1993, ‘Policy paradigms, social learning, and the state: The case of economic policymaking in Britain’, Comparative Politics, Vol. 25, No. 3, pp. 275–296] this study aims to develop an analytical framework for reconstructing given donor’s aid logic of goals and means. The framework keeps attention on tracking everywhere two elementary answers from direct or implied statements in official policy documents: what change or changes exactly a given donor claims to promote in recipient countries and through what actions or measures? With interest in Finnish development policies, all the main policy documents for three decades (1993–2023) were analysed. The finding was an apparently enduring core of policy understanding used in Finnish development policies, giving similar stated logic for aid for three decades.

Տնտեսական աճի ներառականությանը միտված հարկաբյուջետային քաղաքականության միջազգային փորձ / International experience with fiscal policies for inclusive economic growth

The challenge for macroeconomic policy is to integrate policies that support economic growth and create and expand equal opportunities to participate in and benefit from the economy. This includes policies to improve the functioning of labour markets, reduce discrimination, support equal access to education and skills, and increase economic and financial inclusion in all parts of society. The idea of inclusive economic development has been introduced into academic discourse in recent decades and has become one of the main guidelines for economic policy makers and implementers in many countries around the world. The policy of formation and redistribution of public revenues through the state budget is important from the point of view of overcoming the existing inequalities in society and solving the problems of inclusiveness. Therefore, it is important to activate public policy with fiscal policy instruments, to increase its effectiveness in the context of ensuring inclusiveness of economic growth, mitigating inequality in the distribution of income and national wealth. This article studies and interprets the international experience and specific features of the application of fiscal policy oriented to the inclusiveness of economic growth, which is especially important from the point of view of identifying opportunities for its localisation in the Republic of Armenia. The conclusions drawn can be useful in the development of solutions aimed at increasing the inclusiveness of fiscal policy in the Republic of Armenia.

Fertility in High-Income Countries: Trends, Patterns, Determinants, and Consequences

High-income countries have generally experienced falling fertility in recent decades. In most of these countries, the total fertility rate is now below the level that implies a stable population in the long run. This has led to concerns among economists, policymakers, and the wider public about the economic consequences of low fertility and population decline. In this contribution, we aim to (a) describe the main determinants of low fertility in high-income countries, (b) assess its potential economic consequences, (c) discuss adjustment mechanisms for individuals and economies, (d) propose a simple economic framework to analyze the long-run economic impacts of low fertility, and (e) draw lessons for economic policymakers to react appropriately. While the economic challenges of low fertility are substantial, a thoughtful and consistent policy response can mitigate most of the adverse consequences.

Empowering women in central banking

ABSTRACT When are women appointed to the board of central banks? While progressive societal gender norms may facilitate women's ascension to leadership positions, recent research indicates that women are more likely to assume leadership positions during crisis periods. Because of the widely documented 'male dominance' in the policy domain of central banking, analyzing changes in women's descriptive representation on central bank boards provides a unique laboratory to study the role of women in economic policymaking. Building on previous literature on women's political leadership, we argue that sovereign debt crises are powerful catalysts for lifting women into leadership positions. We hypothesize that appointing women to central bank leadership positions during sovereign financial distress signals a policy change to bolster monetary policy credibility. Using data covering 90 countries from 2000 to 2017, we show that women are more likely to be appointed to central bank leadership positions during a sovereign debt crisis. A sovereign debt crisis increases the likelihood of women’s appointments to a central bank board by 21.1 percent. To mitigate concerns that our results are spurious, we implement a battery of robustness checks. Our study suggests that women's empowerment can be beneficial in restoring monetary policy credibility during sovereign financial distress.

Policy Impact and Voter Mobilization: Evidence from Farmers’ Trade War Experiences

How does the extent of policy benefits—not simply their presence—affect political engagement? While fundamental to understanding the electoral implications of economic policymaking, addressing this question is challenging due to the difficulty of measuring individual voters’ policy outcomes. We examine a natural experiment embedded in President Trump’s Market Facilitation Program (MFP), which aided a core Republican constituency: farmers harmed by his 2018 trade war. Due to idiosyncrasies of program design, the MFP undercompensated some farmers for their trade war losses—and significantly overcompensated others—based solely on their 2018 crop portfolios. Analyzing over 165,000 affected voters, we show that improved compensation outcomes had negligible impacts on Republican farmers’ midterm turnout and campaign contributions, even though such variation in benefits significantly affected farmers’ propensity to view the intervention as helpful. This null result is important—our estimates suggest that even highly salient variation in policy outcomes may have limited mobilizing capacity.

Analisis Ekonomi Politik dan Gender: Studi Kasus Peran Perempuan dalam Pembangunan Ekonomi di Indonesia

This study explores the intersection of political economy and gender through an in-depth case study of women's roles in economic development in Indonesia. The research addresses the critical question of how women's participation in economic activities influences and is influenced by broader economic policies and political structures. Employing a mixed-methods approach, the study combines quantitative data analysis with qualitative interviews to provide a comprehensive view of the subject. The findings reveal that while there have been significant strides in women's economic participation, substantial barriers remain due to entrenched patriarchal norms and inadequate policy support. The study concludes that for Indonesia to achieve sustainable economic growth and gender equality, a more inclusive approach to economic policymaking is essential. This involves not only addressing structural barriers but also fostering an environment where women's contributions are recognized and valued. The research underscores the importance of integrating gender perspectives into economic policies to enhance both economic and social outcomes.

GST dynamics in India: Exploring state revenue trends, GDP impact, and economic resilience

Since its inception, the Goods and Services Tax (GST) has been established as a pivotal revenue source for both the central and state governments in India. A comprehensive understanding of the evolving role of GST in shaping India's taxation landscape and influencing both central and state fiscal strategies is aimed to be offered by the research. An analysis of GST collections was presented, and variations in states' revenue performance before and after the implementation of GST were discussed in the study. This examination could include how different states adapted to the new tax regime and whether disparities in revenue generation were present. The data of GST collections across states was utilized, and the variation in the average growth of government revenue after the implementation of GST was analyzed. Descriptive statistics, Paired Sample T tests, and Regression were the statistical techniques used for the analysis. The findings of the study indicate a fluctuating trend in India's GST collections, with Maharashtra consistently leading but experiencing a notable decline in FY 2024. The average growth of GST collections shows an increasing trend until 2023, with a decrease in 2024. Paired T test results reveal a significant positive impact on government revenue growth post-GST implementation across all states. The regression analysis underscores a significant relationship between GST and GDP, emphasizing its broad economic influence. Implications include the need for nuanced policy responses to regional variations and consideration of GST dynamics in economic policymaking for sustained positive effects on government revenue growth and economic stability.

Assistant Professor, Department of Political Science and International Relations, Faculty of Humanities and Social Sciences, University of Central Punjab, Lahore, Punjab Pakistan.

This research paper investigates the profound influence of the International Monetary Fund on the economy of Pakistan from 2013 to 2022. Pakistan has been engaged with the International Monetary Fund (IMF) since 1958. Over this period, Pakistan has entered multiple agreements with the IMF, shaping its economic policies significantly. This study employs a comprehensive analysis of IMF programs and their impact either negative or positive on Pakistan's economic landscape. By employing a case study approach, historical analysis, quantitative assessments, and qualitative perspectives, this paper aims to unveil the intricate dynamics between the IMF's directives and Pakistan's economy. It explores how IMF policies, often linked to loan agreements, have influenced Pakistan's autonomy in economic policymaking, impacted sectors like education and healthcare, and shaped the nation's fiscal policies. The research seeks to offer insights into the multifaceted relationship between international economic organizations, particularly the IMF, and the economy of Pakistan.

Key Factors Affecting Sustainable Economic Growth in the New Normal Era: An Empirical Analysis of Country Data

Purpose - The global economy has entered a new normal era since the financial crisis of 2007 and 2008. In fact, advanced countries and those emerging have been faced with low growth, low interest rates, low prices, high unemployment, increased government debt, and stricter regulations. Nonetheless, some countries have achieved sustainable economic growth. We attempted to identify factors influencing sustainable economic growth in this era by empirically testing a model with data regarding economic indicators in 25 countries. Design/Methodology - For this empirical test, a panel model was set with nine economic variables for 14 advanced and 11 emerging countries. We conducted both a panel unit root test and a cointegration test in order to measure the stationarity of the data. The results of these tests presented that there have been long-term balanced relationships among the variables. We also conducted another empirical analysis through the fixed effects model and random effects model, and performed a Hausman test to confirm that the fixed effects model was more valid. Findings - Empirical evidence using the fixed effects model showed that the consumption level, capital formation, openness of international trade, urbanization, and innovation ability were significant in promoting the economic development of developed countries, whereas population has a negative impact on the economic development of these countries. In emerging economies, capital formation and education level had a positive effect on sustainable economic growth. Population, openness to international trade, urbanization, and industrial structure had negative impacts on sustainable economic growth. This research contained a certain level of originality in the sense that we analyzed the effects of critical economic indicators on the sustainable economic growth in representative countries that have developed economically in the new normal era. Originality/value - Few studies focus on the inf luencing factors of sustainable economic development in a specific country. We may provide important implications for economic policy makers that want to grow their economies sustainably. We also may enrich a theoretical and practical basis on economic development.

“Revealing the future”: an ARIMA model analysis for predicting remittance inflows

PurposeThe purpose of this research is to develop a predictive model that can estimate the volume of remittances channeled toward Yemen’s economic reconstruction efforts.Design/methodology/approachThis study utilized a time-series dataset encompassing remittance inflows into Yemen’s economy from 1990 to 2022. The Box-Jenkins autoregressive integrated moving average (ARIMA) methodology was employed to forecast remittance inflows for the period 2023 to 2030.FindingsThe study’s findings indicate a downward trajectory in remittance inflows over the next eight years, with projections suggesting a potential decline to 4.122% of Yemen’s gross domestic product by the end of 2030. This significant decrease in remittance inflows highlights the immediate need for concrete steps from economic policymakers to curb the potential decline in remittance inflows and its impact on Yemen’s economic recovery efforts.Originality/valueThe impact of global remittance inflows on various macroeconomic and microeconomic factors has long been of interest to researchers, policymakers, and academics. Yemen has been embroiled in violent clashes over a decade, leading to a fragmentation of central authority and the formation of distinct local alliances. In such prolonged turmoil, foreign aid often falls short, providing only temporary relief for basic needs. Consequently, the importance of migrant remittances in sustaining communities affected by conflict and disasters has increased. Remittances have played a crucial role in fostering economic progress and improving social services for families transitioning from conflict to peace. Therefore, this study aims to estimate and forecast the volume of remittances flowing into Yemen, to assist in the nation’s economic reconstruction.

The Metaverse Virtual Economy: A Comprehensive Overview

The concept of the metaverse, where digital and physical realities merge, has garnered significant attention, particularly with advancements in virtual and augmented reality. This study scrutinizes the Metaverse Virtual Economy (MVE), an innovative convergence of real and virtual experiences. By synthesizing insights from prior research on the metaverse, the article explores transformational factors leading from the real world to the meta-universe, considering economic implications, both microeconomic and macroeconomic. Described as an expansive, closed-loop, perfectly competitive market, the MVE minimizes transaction costs and intermediaries. At a macroeconomic level, the MVE may foster sustainable economic growth; however, this growth might be uneven, reflecting the digital divide. As the integration of the metaverse into daily life continues, and the frictions between the two universes diminish, there arises a need to investigate the impact on economic policymaking including the potential applications of virtual currencies. The findings of his study suggest that the MVE poses both opportunities and challenges for businesses and consumers alike. It also emphasizes the necessity for careful exploration, regulation, and understanding of the complex dynamics to leverage the metaverse as a vital component of the future economy.

Macroeconomic Impacts of Oil Price Shocks: Evidence from Iraq by Using Vector Autoregressive Model

Based on a VAR framework, Granger Causality Tests, Impulse Response Function and Variance Decomposition analysis on the annual data from 1970 to 2021, This study aims to demonstrate the effect of oil price fluctuations on GDP, imports, international reserves, and exports in Iraq. The Granger causality results demonstrated a unidirectional connection moving from oil price to imports, exports, international reserves, and GDP, this is an inevitable result because oil prices are determined in the international markets according to specific factors that do not include local economic variables. The variance decomposition result indicated that oil price changes are an important source of variation in the studied variables. Finally, the results of the impulse response function indicated that fluctuations in oil prices significantly impact GDP, exports, imports, and international reserves in Iraq. Therefore, we suggest that economic policymakers work seriously to develop practical plans to diversify the Iraqi economy instead of relying too heavily on oil revenues, which are characterized by sharp and continuous volatility, to avoid the negative effects of these fluctuations on the main macroeconomic variables in Iraq.

Managing Earnings Management: A Framework of Standards, Governance and Ethics

Manipulating earnings to superficially represent financial reports is a flagrant violation of management's assertions about the fairness of financial statements. Therefore, auditors have developed objectives to counter management assertions to ensure that financial reporting is credible and free from earnings management practices (EMP).  This study examines the role of an integrated system of auditing standards and corporate governance surrounded by a framework of ethical values and principles in reducing EMP through the use of a sequential explanatory mixed method. Through this approach, the results obtained from 131 surveys were used as input for the interviews to add a more in-depth understanding of this phenomenon and find fruitful ways to reduce EMP. The results revealed that management's assertion on “accuracy, valuation and allocation” was most involved in EMP, thus, requiring a high degree of exercising professional skepticism. While “objectivity” was the ethical principle most respected by auditors, the results showed that the most serious threat to auditor independence that poses a challenge to the audit profession is the threat of intimidation. Moreover, the study showed that exercising the supervisory role in holding management accountable and following up on the work of auditors to uncover EMP requires real independence of the audit committee from the executive members. The findings have implications for economic policymakers in emerging countries where the sustainability of the audit profession and public companies is critical to economic development and stability. The study provides insights and guidance in mapping corporate governance for the future and benefiting from the experiences of developed countries as outlined in the study’s conclusion.

Quantyfing the impact of the water security index on socio-economic development in EU27

The issue of environmental security in the context of sustainable development is a highly topical one, being intensively studied by specialists both in terms of its impact on biodiversity and on the protection of non-renewable resources, and in terms of its economic and social impact. The authors aim to quantify the impact of water security on economic and social development based on a new structural equation model and identify changes in the latent variable Water Security Index. (WSI), economic development (ED) and social development (SD) dynamics over the period 2000–2022 for the 27 EU Member States. The methodology is based on the use of structural equation systems and the use of the Independent-Samples Kruskal-Wallis Test to identify the influences of water security measures on economic and social indicators and to assess regional disparities of environmental policy development in relation to economic and social development. The research results will highlight the level of homogeneity of regional water security clusters in Europe and the influence of this approach on economic and social disparities. The results of the study highlight the significant correlation between population density, pollution levels and the costs associated with maintaining water quality. The study shows that high population density and high pollution levels disproportionately increase the financial burden of water quality management. In addition, the analysis highlights the social ramifications of neglecting the sustainability of water sources, particularly in regions experiencing low economic growth. In such scenarios, the negative social impact intensifies, highlighting the importance of sustainable practices. The results allow the formulation of the following public policies: Standardization of the national water quality management framework in line with the European framework; Establishment of organizations to monitor the safety of water sources and the health of the local population; Continuation of innovations in the field of water environment protection; Promotion of social responsibility towards the aquatic environment; Continuation of the process of improving water management governance. The results are useful for economic, environmental and social policy makers to optimise European sustainable development strategies.

Empirical Approach to Modelling and Forecasting Inflation using ARIMA Model: Evidence from Tanzania

This study investigates the dynamics of the inflation rate (INFL) in Tanzania spanning from 1990 to 2021 using advanced time series analysis techniques. The dataset sourced from the World Bank online database serves as the basis for analytical exploration. Initially, the Autoregressive Integrated Moving Average (ARIMA) model is applied to understand underlying patterns in the INFL data. Transitioning to Seasonal ARIMA (SARIMA) modeling encounters challenges due to the absence of pronounced seasonality or clear trends. Unit root tests, including the Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests, assess the stationarity of the data. Following the identification of non-stationarity, differencing is employed to achieve stationarity. Estimation of ARIMA models (ARIMA (1,1,1) and ARIMA (2,1,1)) is conducted, with diagnostic checks confirming the suitability of the ARIMA (1,1,1) model. The study contributes to the understanding of inflation dynamics and facilitates evidence-based economic policymaking in Tanzania.

IMPACT OF OIL SHOCKS ON THE OIL, AGRICULTURAL AND FOOD INDUSTRY - QUANTILE AND OLS REGRESSION

This paper determines the impact of Brent oil shocks on the price of shares of companies from the oil, agricultural and food industries that includes the period of the COVID-19 pandemic. For this purpose, they use a quantile regression approach and compare its findings with a standard Ordinary Least Squares (OLS) regression model. Moreover, in this research they use quantile regression, which enables them to analyze different quantiles of share prices of companies from the oil industry, the agricultural industry, and the food industry. They observe three different periods - a period of recession, a normal period and a period of expansion. Finally, empirical evaluations using quantile regression and OLS models show us that shocks from the oil market are more pronounced in companies from the oil industry compared to companies from the agricultural and food industries. The findings of this research provide important information for investors, economic policy makers, and other parties.

SMEs sustainability: The role of human resource management, corporate social responsibility and financial management

Research background: The sustainability of small- and medium-sized enterprises (SMEs) represents a significant scientific and professional problem in the current turbulent period because these enterprises play an important role in any country’s economic and social systems. Purpose of the article: This paper aimed to define the significant sustainability factors of small and medium-sized enterprises and to quantify their impact and importance on the sustainability of SMEs. The areas of Human Resource Management, Corporate Social Responsibility, and financial management were defined as significant sustainability factors. Methods: Empirical research, on which the scientific hypotheses were formulated and evaluated, was conducted in June 2022 in V4 countries (Czech Republic, Slovak Republic, Poland, and Hungary) using a structured questionnaire. The study accumulated a sample of 1398 respondents. Data collection was conducted through an external agency, MN FORCE, operating in Central European countries. The Computer Assisted Web Interview (CAWI) method was used to record respondents’ perceptions. Descriptive statistics, correlation analysis, and linear regression analysis were used to evaluate the hypotheses. Findings & value added: The research showed that all defined factors in the areas of Human resource management (HRM), Corporate social responsibility (CSR), and financial management of the firm had an impact on defined sustainability attributes. The greatest impact was found on the firm’s financial management, followed by CSR and HRM. The empirical results confirm that the intensity of the independent variables varies across the V4 countries. These results also show that the intensity of the selected HRM, CSR, and financial management factors of a firm is higher in the integrated models than in the models for individual V4 countries. The research results have shown that a range of factors determine the right attitude towards the sustainability of companies. In this context, economic policymakers and entrepreneurs must perceive sustainable growth as complex and apply a systemic approach to its design and implementation.