Final Consumption Expenditure Research Articles

The application of fractional calculus in economic growth modelling: An approach based on regression analysis

This paper establishes a fractional-order economic growth model to model the gross domestic product (GDP). The fractional-order model consists of a differential equation of integer and fractional orders, where the GDP is a function of several exploratory variables. An empirical application is adopted using Malaysia's GDP data from 1956 to 2018, incorporating exploratory variables such as total population, crude death rate, production of logs, gross fixed capital formation, exports of goods and services, general government final consumption expenditure, private final consumption expenditure, and the impact of investment. Extensive comparisons were carried out to evaluate the modelling performance of the full and reduced fractional-order multiple linear regression models with the benchmark models, namely full and reduced integer-order multiple linear regression models. Results indicate that the reduced fractional-order model with six exploratory variables, excluding the crude death rate and production of logs, predominates other models for the in-sample model fitting based on the Akaike information criterion, coefficient of determination and other criteria. Furthermore, the fractional-order model offers the best-of-sample forecasts evaluated based on the root mean square forecast error and mean absolute forecast error. The application of the Diebold–Mariano test also serves to confirm the superior performance of the suggested fractional-order model, revealing a significant difference in forecasting ability between the fractional-order and integer-order models.

Financial Inclusion and Financial Development Determine Human Development in Selected Asian Countries

The research highlights the crucial role of accessible financial services and robust financial systems in enhancing human development outcomes, offering valuable insights for policy-makers aiming to foster inclusive economic growth. This research makes an effort to highlight that financial inclusion and financial development with other major factors determine human development in some selected Asian economies. The authors make use of panel data from 8 Asian nations for the year 2005 to 2018. The dependent variable is the human development index. However, financial inclusion, financial development, urban population, and general government final consumption expenditure are taken as explanatory factors in this analysis. Fixed effect results show that financial inclusion with financial development, urban population, and general government final consumption expenditures have enhanced the human development of Asian countries. The study findings recommend for maximum financial approach and financial amenities in improving the human development of nations. There is a dire need for more improved quality of education for high living standards and development.

Do Investments Have an Impact on Reducing Poverty? ARDL Approach

Purpose: The purpose of this research is to examine the impact of foreign direct investments (FDI) and gross fixed capital formations (GFC) on poverty reduction in Türkiye. Design/Methodology: In this study, which analyzes the impact of investments on poverty, two different models were established. The models constructed using 1982-2020 annual data were analyzed with the ARDL method. Findings: As a result of the analysis, both foreign direct investments and gross fixed capital formations have positive (poverty reducing) effects on poverty reduction in Türkiye. Gross fixed capital formations are more effective in reducing poverty than foreign direct investments. Limitations: The number of poor people in Türkiye is accessed discretely. This situation has led to a limited number of empirical studies in the field of economics in Türkiye that use time series analyses related to poverty. In this study, this constraint is overcome by using household final consumption expenditures per capita (HFC) as a proxy variable as in the literature. Originality/Value: In this study, two separate models were established with foreign direct investments and gross fixed capital formations as independent variables. The comparison of the impact of these two types of investment variables on poverty in Türkiye reveals the originality of this study.

Impact of Foreign Aids on Poverty in Nigeria: A Longitudinal Study (1992–2023)

Aids for citizens of a country like Nigeria cannot be overlooked. People require financial and other forms of assistance to be able to meet their basic needs. Conversely, the significance of all the assistance received from foreign bodies on households and nonprofit institutions in Nigeria is not clear. The study examined Net Official Development Assistance and Official Aid Received (NAID) and its effect on Households and NPISHs Final Consumption Expenditure (HNFC). The study used time series, relying on secondary data. It used Augmented Dickey Fuller (ADF) as a unit root test. It further tested the long run relationship among the variables via Johansen co- integration test. Simple regression model equation was adopted for the work. The study revealed that NAID has a significant effect on HNFC. The study concludes that NAID are the predictors and determinants for NAID in Nigeria. The study recommends that more Foreign Aid be encouraged in Nigeria.

Topical issues of the formation of an effective economic and social policy in Cambodia

Cambodia, currently classified as a lower-middle-income developing country, aspires to reach upper-middle-income status by 2030. To achieve this ambitious goal, the Cambodian government has embraced an open market economic system and prioritized attracting foreign investments as well as encouraging final consumption expenditure (FCE) and stimulating the level of industries, including construction. This study aims to find out the influences of the fluctuations of foreign direct investment (FDI), FCE, and industry (including construction) (IIC) on gross domestic product (GDP) growth in Cambodia and to identify the key factors that can increase FDI, FCE, and IIC growth. The study employs descriptive and correlational analysis, mainly focusing on statistical analyses by constructing an econometric model. The results indicate that Cambodia’s GDP is directly and positively impacted by the FDI, FCE, and IIC, according to the analysis of the specification of the econometric model using a linear mathematical equation. The study concludes that the Cambodian government’s attention to strategic policies and initiatives in promoting FDI, FCE, and IIC, ultimately leading to a higher overall economic growth rate, is crucial. Factors such as political stability and governance, regulation and legal framework, infrastructure, human capital development, market access, publicprivate partnership, fiscal policy, and social protection should be at the forefront of the Cambodian GDP development roadmap.

Assessment of Factors Affecting Optimal Tax Burden and Tax Revenues in RA

The purpose of the article is to identify the factors affecting the optimal tax burden and tax revenues of RA and evaluate their impact. The tasks of the work are to identify the range of factors affecting the optimal tax burden and tax revenues, to evaluate their impact and transmission mechanisms using econometric models. The analyzes in the work were carried out using statistical and econometric methods, the version of the Laffer curve, modified by Balatsky. As a result of the study, it was revealed that the evaluation results show that RA economic growth, other things being equal, will reach its maximum value when the tax burden is 20.9-21.9 %, which we considered as the optimal tax burden range. The government's final consumption expenditure does not ensure a sufficient level of economic growth or a continuation of high growth. The assessment of the impact of indicators determining GDP growth on tax revenues shows that the indicators determining GDP growth, in general, also have a significant impact on tax revenues.

Exploring the Relationship Between Manpower and Economic Indicator in Indonesia: A 30-Year Analysis

This research investigates the relationship between manpower and economic Indicator in Indonesia over a 30-year period from 1992 to 2022. Specifically, it examines the influence of Gross Domestic Product (GDP), Education, Age, Final Consumption Expenditure, Foreign Direct Investment, and Inflation on Wages, alongside the effects of employment and economic growth instruments. This study using Error Correction Model (ECM) along with unit root test, cointegration test, and Autoregressive Distributed Lag (ARDL) dependent test approach with the result that all of variables are stationary at the 1st difference level, this study aims to see the long-run and to know short-run relationship among the variables. The findings reveal a significant long-term relationship between wages and factors such as GDP (0.0000), higher education level (0.0006), secondary education level (0.0009) government spending (0.0149), and inflation (0.0312), while other variables such as basic education (0.0751), age of labour (0.3256), and Foreign Direct Investment (0.3417) are insignificant, while the short-run impact is seen to be less significant. This research proves that economic growth will always affect wages and the importance of controlling inflation as well as stabilising economic conditions to influence wages positively. Through rigorous statistical testing, this study contributes to understanding the dynamics affecting wages in Indonesia, highlighting the critical role of economic and demographic factors.

Embedded but overlooked values: Ethical aspects of absolute environmental sustainability assessments

AbstractCurrently used sharing principles (grandfathering and final consumption expenditure) do not align with the purpose of Absolute Environmental Sustainability Assessments (AESAs)—enabling all to meet basic needs within the planetary limits. This discrepancy, though niche within life cycle engineering, demands attention due to the integration of the sharing principles in the widely adopted Science Based Targets initiative, embraced by 4000+ companies, representing over a third of the global economy. This paper suggests operationalizing sufficientarianism as a fair sharing principle for AESAs guaranteeing a minimum threshold of well‐being for all. The theory of human needs is highlighted to distinguish luxuries from necessities. This is vital when assigning shares to products/companies, as there's no room for luxuries (products for someone which cause others to fall short), given the extremely limited individual safe operating space, regardless of the sharing approach. This paper argues that sufficientarian‐based sharing principles must overlook historically skewed material welfare distributions to ensure no one falls below the minimum threshold. It underscores the need for an interdisciplinary approach to sharing principles, acknowledging and discussing diverse value perspectives on equal grounds. The focus is to inform and discuss the development of new sharing principles, which introduces initial steps toward a sufficientarian‐based approach. The paper concludes that recognizing embedded values is paramount in sharing principle development. Failing to do so risks letting quantifiable metrics dictate the values integrated into AESAs without open discourse.

Determinants of digital technology development in sub-Saharan African countries: evidence from panel data analysis

The primary objective of this research is to explore the elements that shape the progression of digital technology in Sub-Saharan African nations. The study employs data obtained from 16 countries, covering the period between 2000 and 2020. Employing fixed effect panel regression analysis, our research indicates that various non-technological factors significantly impact digital technology development in the region. The results highlight that variables including general government final consumption expenditure, inflation rate, employment growth rate, financial development, ease of doing business index, logistics performance index, international migration, access to electricity, and access to safe drinking water have a positive impact on the development of digital technology. Conversely, international trade is identified as a negative influence, primarily due to insufficient infrastructural development. These findings underscore the significance of non-technological elements, encompassing aspects like globalization, economic conditions, favorable digital ecosystems, and the fulfillment of basic human needs, in shaping the landscape of digital technology in the region. The study, while acknowledging limitations in terms of selected indicators, years, and countries, emphasizes the need for broader investigations in future research. Practically, the study suggests that governments in the region should prioritize addressing these non-technological factors to fully leverage the potential of digital technology development. The originality and value of this research lies in its exploration of non-technological determinants, shedding light on their pivotal role in shaping the digital technology landscape in sub-Saharan Africa.

Fiscal Policy And Poverty In The Southern African Customs Union: The Case Of Frontier Technology Readiness Index and Skills

The study examines the relationship between fiscal policy, the level of poverty, and the frontier technology readiness index (skill) in the Southern African Customs Union over the period of 2012 to 2022. The technique of pooled ordinary least squares was used to ascertain the empirical findings, while the LLC and IPS established the stationarity of the variables. The empirical findings show that government expenditure on education, indirect taxes, and the skills index directly affect household consumption expenditure significantly and, by implication, reduce poverty. However, the interaction of government expenditure on education and skills significantly reduces household final consumption expenditure. The essence of the study is that the respective government in the Southern African Customs Union should harness efforts towards integrating relevant skills into the educational system in light of the 21st-century technology revolution. It is admitted that previous studies have largely concentrated on issues such as income inequality, financial inclusion, government expenditure program in addressing the problem of poverty in developing economies, this study, while observing the crucial role of fiscal policy, evaluates the effect of a frontier technology readiness index, skills, in abating the severity of poverty in the region.

The impact of unprecedented growth in public investment on stimulating the Indian economy

The aim of the article is to compare the effects of public investment and public consumption in the Indian economy. This issue is particularly relevant in the context of the unprecedented increase in public investment in India, which is becoming one of the biggest economies globally. The empirical research is based on a New Keynesian model. The novelty of the applied methodology lies both in the inclusion of public capital as a factor of production, and the partial substitution between public and private consumption in the model. The results show that government gross capital formation in the short run is a slightly more effective method of stimulating the Indian economy than government final consumption expenditure. However, the biggest differences between the effects of public investment and public consumption are evident in the long term. The impact of public consumption on GDP fades out quickly, while public investment raises the level of output for a long period. Government gross capital formation also affects employment and consumption more strongly than government final consumption expenditure does. Thus, the main implication of the study is to recommend increasing public investment in emerging markets, to boost their economies.

Seçilmiş Değişkenlerin Dış Borç Stoku Üzerine Etkisi: Türkiye Örneği

The aim of this study is to examine the long-term relationship between trade openness, fixed capital formation, GDP per capita and general government final consumption expenditures on external debt stock, using annual data for the period 1994-2021 in Türkiye, with Johansen cointegration analysis. In this context, FMOLS and CCR coefficient estimators were used to determine the long-term relationships of the variables. According to the findings obtained from the FMOLS and CCR coefficient estimators, the general government final consumption expenditures affected the external debt stock the most among the variables examined in Türkiye in the 1994-2021 period. It was followed by GDP per capita, fixed capital formation and trade openness. In summary, while fixed capital formation, trade openness and general government final consumption expenditures increase Türkiye's external debt stock, GDP per capita decreases the external debt stock in the same economy.

Private and Public Expenditure on Education in India


 This paper examined the trends in private and public expenditure on education in India during the last seven decades. The analysis is based on public expenditure on education compiled by Ministry of Education, Government of India, that includes expenditure incurred by education department as well as by all other departments on education and training-related programmes and activities. The private final consumption expenditure (PFCE) on education as estimated by the national accounts and statistics (NAS) is the base for private expenditure on education. It is observed from the analysis that India’s spending on education reached its peak in the recent past. Public and private expenditure on education are respectively equivalent to 3.9% and 2.7% of its GDP in 2018-19. Together, the country’s spending on education is equivalent to 6.6% of GDP. A notable trend over the past three decades is that private expenditure on education is growing faster than that of the public. The ratio of public to private in terms of expenditure on education has declined during this period. This reflects increasing privatisation of education in India, and has far reaching policy implications.

Forecasting and Cross-Correlation of Series on the Waste Generation, Population, GDP and Household Consumption Expenditures in Jordan

The household waste is the biggest contributor to the total municipal solid waste generation. The main objective of the research is to discover the Jordanian economy in four dimensions: the household waste generation, the number of population, the gross domestic product (GDP) at purchasers’ prices, and the household final consumption expenditures. In the focus of interest are (1) finding adequate time series models for forecasting of the number of population, the GDP at purchasers’ prices, the household final consumption expenditures, and the household waste generation; (2) the cross-correlation between the household waste generation variable and other variables – population, GDP and household final consumption expenditures. The analysis of cross-correlation functions has revealed that pairs of series (waste/gdp, waste/consumption, waste/population) move in one direction with no shift in time of one series to the other. The relationship in every pair of series is significant. It is expected that in the short-run, ceteris paribus, with the growth of the population numbers, GDP and/or household consumption expenditures, the level of household waste generation in the country will also grow in a close relationship. Appropriate ARIMA models have been proposed to use for the short-run forecastsing of time series. The research outcomes are useful for policy makers to realize the scale of the household waste problem and to optimize capital expenditures into the waste management system of Jordan.

On the Impacts of Government Size on Economic Growth in India: Some Evidence from Smooth Transition Autoregression Model

This article examines the threshold effects of government size (measured as a percentage share of government final consumption expenditure in GDP) on economic growth from a non-linear perspective. We apply a smooth transition autoregression (STAR) model to estimate the threshold level of government size and its impact on economic growth in India for the period spanning from 1971 to 2019. The empirical results reveal that the relationship between government size and economic growth is non-linear. The study finds a statistically significant positive relationship between the size of the government and economic growth below the estimated threshold level of government size of 10.45 per cent. Above the 10.45 per cent threshold level, government size has a deleterious impact on economic growth. The results also reveal that the transition from one extreme economic phase to another is gradual. The findings of our study recommend that policymakers can enhance India’s economic growth by restricting government size to the estimated threshold level or by reducing the size of the government when it lies well above the threshold level. JEL Codes: JEL H00, JEL E6, JEL E62

Economic Welfare in Central and Southeast European Union Countries – An Econometric Approach

The importance of economic aggregates per capita: final consumption expenditure and Gross Domestic Product, for the well-being of the entire population of a country determined the analysis of the economic convergence in the countries of the Central and South-Eastern European Union (CSE). The econometric approach of convergence as a steady state of these variables was performed on panel data models with an error correction term. Establishing the long-run and short-run equations describes the convergence of welfare in the CSE region and the choice of the best model.

THE SYSTEM OF STATISTICAL INDICATORS OF THE STANDARD OF LIVING OF THE POPULATION AND THEIR SIGNIFICANCE

The article shows the indicators of household income in the System of National Accounts, cash income, primary income, adjusted gross income, one-time income and how to calculate it, national income, final consumption expenditures of households, cash income of the population and balance of expenditures, indicators of accumulated property and housing, elasticity coefficient, housing, income stratification of the population, cash income deficit and its calculation method, poor T he concepts of poverty, poverty line and extreme poverty are given. KEY WORDS: income of the population, system of national accounts, gross income, poverty level, living standards purchasing power, one-time income, cash income deficit, poverty line.

The relationship of employment in the agricultural sector to electric power consumption, government final consumption, and the democracy index in Bangladesh

Agriculture stands as the cornerstone of Bangladesh’s rural economy, sustaining not only food production, but also serving as a primary source of employment for its rural populace. Modernising this sector holds the potential to bolster its expansion, and generate further employment opportunities, thereby fostering rural socio-economic development. The purpose of the study is to examine the impact of electric power consumption, government final consumption expenditure, and the democracy index on employment in the agricultural sector in Bangladesh. Employing a dynamic ARDL model, we examined the short and long run dynamics between agricultural employment and other independent variables, utilising data spanning the period from 1991 to 2022. The findings underscore the pivotal role played by electricity in the growth of employment in agriculture. The study illuminates the nuanced interplay between various factors, revealing that government expenditure positively influences the agricultural sector, while the democratic landscape exerts a negative influence. In light of these insights, the paper advocates for strategic policy measures, emphasising the critical need for the government to prioritise the development of the electric sector, recognising it as a linchpin for sustainable agricultural growth and overall socio-economic advancement. Simultaneously, the study highlights the imperative of fostering a conducive political environment, underscoring its direct correlation with positive changes in the agricultural sector. Through these concerted efforts, Bangladesh can pave the way for a more resilient and prosperous agricultural landscape, contributing significantly to its overarching socio-economic development.

An emprical study to investigate the size of non-governmental organizations in OECD countries

This study aimed to analyze the factors affecting the size of non-governmental organizations (NGOs) from a multinational perspective. Empirical analyses were conducted through econometric modeling, and the data of the 17 countries from 2003 to 2019 were used. The data was obtained from the World Bank and OECD database. We used advanced panel data estimation techniques (CUP-FM and CUP-BC) to obtain long-run coefficients. GDP per capita, general government final consumption expenditure, adult education at tertiary level, and Gini index growth declined grants by private agencies and NGOs? contribution to GDP (GinGDP) initially but after a threshold level, GinGDP increased with growth at later stages of these variables. Urban population growth, employment, and foreign population have reducing effect on the size of NGOs. The size of NGOs has bidirectional causality relationship between GDP per capita, adult population at tertiary education level, employment to population ratio, and Gini index; and unidirectional causality between urban population growth, general government final consumption expenditure, and foreign population.

Mineral rents, natural resources depletion, and ecological footprint nexus in high emitting countries: Panel GLM analysis

Natural resource depletion is a serious problem facing many countries today. As minerals and other natural resources are extracted from the ground, they are not replaced, leading to biodiversity loss and environmental degradation. The problem of natural resource depletion is compounded by the fact that, in many cases, mineral rents are not used to help replenish the resources being taken out of the ground. This study examines the impact of mineral rents and natural resources depletion on the ecological footprint in the high emitting countries from 1973 to 2019, using general government final consumption expenditure and international trade as moderating variables. Mineral rent and international trade are negatively associated with the ecological footprint. In contrast, general government final consumption expenditure and natural resource depletion are positively associated with an ecological footprint in the top emitting countries. Government expenditure and natural resource depletion deteriorate the environment, while mineral rents and exports of goods and services improve the environment. By investing in green technologies, the highest-emitting countries can reduce their ecological footprint and increase sustainability. In conclusion, the policy implications for mineral rents are clear – reducing the ecological footprint of the highest-emitting countries. By levying mineral rents, governments can ensure that companies pay their fair share for the resources they extract and raise revenue to fund environmental protection and renewable energy projects. This will help to reduce emissions and improve air quality, making the highest-emitting countries more sustainable in the long term.