Final Consumption Expenditure Research Articles

DISTRIBUTIVE TRADE AND ECONOMIC GROWTH: EU28 EVIDENCE FOR THE PERIOD 2008-2015

The purpose of this paper is to appoint the causality between economic activity in the sector of distributive trade and the economic growth of 28 European Union nations. Specifically, it examines the impact of changes in turnover per employee in the distributive trade sector in EU member states on the tangible economic growth rate. The determination to adopt this approach stems from the fact that existing studies mainly explore indirect relationship between economic activities in distributive trade and economic development, with less focus on the direct impact of distributive trade on economic growth. The paper utilizes information for the period from 2008 to 2015. The research relies on multiple regression model, with the Hausman test its robustness. The results indicate that a hike in turnover per employee in the distributive trade sector by 10 euros per year in one EU member state increases its real economic growth rate by 0.15% in that same year. The significance of the made results is reflected in the fact that the survey takes into account the last economic crisis, and highlights negative effects of final consumption expenditure of general government % GDP on the tangible economic growth rate in EU member states.

The Convergence of Food Expenditures in the European Union Countries – a Spatio‑Temporal Approach

The paper presents the analysis of the convergence of household final consumption expenditures on food in the European Union countries in the period of 1999–2015, considering spatial and spatio‑temporal tendencies and dependencies. The aim of this research is to verify whether space significantly influences the convergence of the considered process. The subject of the investigation is the share of household final consumption expenditures on food in total final consumption expenditures of European countries. Spatial and spatio‑temporal tendencies and dependencies are surveyed using the conception of spatial and spatio‑temporal trends and spatial autocorrelation. The convergence of the process is investigated with the use of β‑convergence models for panel data (also in the spatial terms). Absolute and conditional convergence approaches are applied. For the conditional approach, the models are expanded to incorporate the influence of additional determinants, including space, disposable income and the level of food prices.

Fractional Calculus in Economic Growth Modelling of the Group of Seven

Abstract This paper presents models of economic growth for all the countries of the Group of Seven (G7) in the 1973–2016 period. The models consist of differential equations, of both integer and fractional order, where the gross domestic product (GDP) is a function of the country’s land area, arable land, population, school attendance, gross capital formation (GCF), exports of goods and services, general government final consumption expenditure (GGFCE), and broad money (M3). Results show that fractional models have a better performance, measured by several summary statistics, without increasing the number of parameters, or sacrificing the ability to predict GDP evolution in the short term. A standard validation procedure for economic growth models is presented for the assessment of future models.

Assessing the environmental impacts of EU consumption at macro-scale

Sustainable Consumption and Production is one of the leading principle towards reducing environmental impacts globally. This study aims at combining Environmentally-Extended Input-Output Analysis (using EXIOBASE 3) with up-to-date impact assessment models to quantify the environmental impacts induced by final consumption in the EU Member States in 2011. The environmental extensions are characterized in 14 environmental impact categories out of the 16 used in the Environmental Footprint life cycle impact assessment method. A contribution analysis of key products and services as well as emissions and resources, which drive the environmental impacts of EU consumption, is conducted. Environmental impacts are mainly induced along the supply-chain of products and services. Several expenditures relative to services represent large shares both in the total final consumption and in the 14 impacts under study, despite a relatively low impact intensity. Food products, in particular meat and dairy products, are identified as key contributors regarding acidification, eutrophication, land use, and water use, and to a lower extent climate change. Finally, several manufactured products, raw materials and basic products respectively importantly contribute to impacts on human toxicity, freshwater ecotoxicity and resource uses. The total volume of final consumption expenditures per EU Member State appears a key explanatory variable to most of the impacts embodied in their consumption, yet to a lower extent regarding water use and fossils resource use. Finally, the current limitations in using EXIOBASE 3 for environmental impact assessment are discussed, with specific attention to EXIOBASE environmental extensions and to the case study on EU consumption. Since the classification of emissions and resources for impact assessment requires a number of assumptions that may influence the results, a sensitivity analysis is performed to exemplify some of the key issues relative to the characterization of impacts based on EXIOBASE environmental extensions.

Does the WTO membership economically matter? Evidence from South Caucasus economies

Motivated by the researches questioning the effectiveness of GATT/ WTO, and WTO membership on member country economies, this article studies the impact of joining to this organization on main macroeconomic indicators: economic growth, exports, imports, government and households final consumption expenditures, and net FDI inflow in case of South Caucasus economies for the period 1994-2012. Based on multiply regression model for time-series, and panel data analyses for Georgia, Armenia, and Azerbaijan, the article makes a significant contribution to the existing literature. That is, research findings support the claims that WTO membership affects countries differently, depended on the structure of economies. This belongs to the impact on economic growth, exports, and imports. Nevertheless, WTO does not strongly maĴer for net FDI inflow. Final consumption expenditures of both governments and households are strongly affected by WTO membership. The membership causes to increasing the government final consumption expenditures and significantly decreasing the household consumption expenditures.

Effects of final expenditures on ICT goods and services on the croatian domestic output and imports – the input-output approach

Information and Communication Technology (ICT) has a significant role in the growth and development of almost every national economy. The aim of this paper is to estimate the overall contribution of final expenditures on ICT goods and services on the domestic output and imports of Croatia in terms of gross value added (GVA) and employment. In order to quantify the direct, indirect and induced effects of final expenditures on ICT goods and services to the overall Croatian economy, input-output (IO) analysis is applied. The results of the empirical analysis show that of all three categories of total final uses, the final consumption expenditure on ICT goods and services recorded the highest total contribution in terms of GVA and in terms of employment. The final consumption expenditure of households had the most important role in generating GVA and employment, while the impact of government and non-profit organisations serving households expenditures was limited. At the activity section level, the majority of GVA and the number of jobs were generated in the activity section J – Information and Communication. The total number of employees induced by final expenditures on goods and services produced by the ICT sectors is estimated at 2.8%. The ICT sectors contributed to the total Croatian GVA in a range higher than 4.5%.

Demand for Imports and Components of Final Expenditure: An Empirical Study with Special Reference to the Korean Import Demand Function

This paper presents a detailed empirical investigation of Korea’s demand for imports. In particular, our study provides fresh estimates of partial elasticities of demand for imports with respect to each key component of final expenditure including final consumption expenditure, and expenditure on capital formation. A Johansen multivariate co-integration analysis is employed on the post-global financial crisis quarterly macroeconomic data such as final consumption, gross fixed capital formation, exports and relative import prices for the sample period 2009-2018. In support of the empirical framework used in this study, we have found significant differences to exist between various long-run partial elasticities of demand for imports while import elasticity of demand with respect to expenditure on fixed capital formation is found to be negative. This latter result appears to imply that incremental increases in capital formation can provide an effective mechanism for reducing reliance of Korea on imports in the long run. According to the short-run forecasting model, we have found that the current period changes in the demand for imports are related only to the previous period changes in relative price of imports.

Impact of Debt Threshold Level on GDP Per Capita Growth: Evidence of G7 Advance Countries

The aim of this study is to investigate the relationship between debt threshold and GDP per capita growth by using Panel Threshold Regression. The sample of the study is G7 (Advanced Countries) from the period of 1995 to 2015. The results suggested that the scale of debt threshold is ambiguous in this study because debt threshold has not significant effect on GDP per capita growth at the threshold level of 62.47%. The magnitude of debt effect is not same on below and above threshold level. If debt is below and above from 62.47%, its significant positive effect on GDP growth at 0.70% and 0.47% respectively. Also, explanatory variables are used in the study include inflation, trade to GDP, gross saving to GNI, government final consumption expenditure and total investment to GDP. There is a mix result of explanatory variables in the study as inflation and trade to GDP have positive effect on GDP per capita growth but does not produce significant result while gross saving and total investment to GDP have significant positive effect on GDP growth. At last, government final consumption expenditure has significant negative effect on GDP growth.

Relationship between Remittance and Economic Growth: Evidence from Bangladesh

Remittance is one of the major sources of capital especially for the developing countries like Bangladesh. This study attempts to explore the relationship between remittance and economic growth in Bangladesh. Time series data from 1995-2016 extracted from the World Bank database as well as Bangladesh Bank statistics were used to measure the relationship of remittance and gross domestic product (GDP) with some other variables such as gross capital formation, gross domestic saving and household final consumption expenditure. Pearson’s correlation coefficient is estimated between the variables. Moreover, annual growth (%) of remittance earning by Bangladesh has been calculated and compared with the GDP growth of Bangladesh. The study has found that on an average, remittance of Bangladesh has been increased by 10.85% from 1995-2016 which is higher than the average growth of the country’s GDP. It has revealed that there is a positive relationship of remittance with the GDP, gross capital formation, domestic saving and household final consumption expenditure in case of Bangladesh. However, there is a frequent fluctuation of remittance flow in Bangladesh in the recent years. Thus, this study recommends that Bangladesh should take proper initiatives for maintaining an increasing trend of remittance in the coming years which would be useful for the socio-economic development of the country.

EU enlargement: Does economics of regional integration matter?

For stability and advance of the EU and prospective member countries, it is important to assess the best time for new enlargement. In this paper, we have tested a number of macroeconomic and macro-financial variables in order to check whether a number of countries were ready to join the EU, and whether the candidates are ready. Some variables present criteria of nominal convergence as defined in Maastricht Treaty, while the rest of variables indicate the level of real convergence. Univariate analysis has indicated that the membership in the EU is significantly affected by GDP per capita, general government final consumption expenditure, final consumption expenditure, gross capital formation, gross national expenditure, and inflation. Following the univariate binary logistic analysis and separation of variables that affect the individual membership in the EU, a multivariate regression analysis was applied. Multivariate binary logistic regression confirmed significance of general government final consumption expenditure and gross capital formation. The analysis indicated the importance of selecting the timing of accession in terms of the achieved economic development, expressed through the selected macroeconomic indicators. Moreover, it appears that the list of tested economic criteria was played at best a secondary importance in past European enlargements.

Impact of Selected Macroeconomic Determinants on Economic Growth in India: An Empirical Study

Due to the socio-economic, infrastructural and governance peculiarities, identification of key macroeconomic factors determining the economic growth in developing countries becomes a complicated case. The present study attempts to assess the impact of foreign aid, government consumption expenditure, foreign direct investment, trade openness, exchange rate, human capital development, and inflation on economic growth in India by using yearly data for the period of 46 years, that is, from 1971 to 2016. An autoregressive distributed lag (ARDL) bounds model enables to examine the short-run and long-run impact of selected determinants on economic growth during the study period. The outcomes of the study find that in the long run, foreign aid, the government’s final consumption expenditure and foreign direct investment have a positive and significant impact on economic growth, whereas, economic growth has been negatively influenced by exchange rate and human capital development. Contrary to the long run, foreign aid has a negative and significant impact on economic growth in the short run. The short-run outcomes show that all the selected macroeconomic determinants have either negative or positive influence on economic growth. To ensure the long-run economic growth, besides regulating the exchange rate fluctuations, policies related to export -import and human capital development need to be re-examined.

Macroeconomic effects of the budget deficit in the Republic of Macedonia

Abstract Although a decade has passed since the global financial and economic crisis of 2008, the expansionary fiscal policy in Macedonia can still be felt, primarily through an increased level of public expenditures aimed at stimulation of the economic growth. From 2008 onwards, the Republic of Macedonia has continuously recorded a negative budget balance, which affects the resources allocation and the overall economic situation. The question that arises is whether such interference by the Government in the functioning of the market economy is necessary, especially having in mind the EU regulation in this area. Using a multiple regression model for the period 1996-2015, this paper examines the impact of the budget deficit on Gross Domestic Product (GDP) per capita in Macedonia. Results show that the budget deficit is not a statistically significant determinant of GDP per capita, supporting thus the Ricardian equivalence theory. The analysis is conducted on the basis of statistical data from the World Bank’s database, as well as data from the National Bank of the Republic of Macedonia. Household final consumption expenditure, the unemployment rate and the official exchange rate of the Macedonian Denar against the U.S. Dollar are also taken into consideration as controlling variables. GDP per capita and household final consumption expenditures are in current prices, with natural logarithms applied, whereas the other variables are in nominal terms. The purpose of this paper is to provide an insight into the empirical relationship between the two main variables of interest and to initiate further discussion and analysis.

Fuel consumption in road transport: A comparative study of China and OECD countries

Energy conservation and emissions reduction have been the focus of the road transport sector due to its energy-intensive and air pollution-intensive nature. It also embodies the imprints of human technological progress. This paper compares the energy consumption of the road transport sector in China and OECD countries. We used time series and panel data, co-integration analysis, error correction model and dynamic model to study the impacts of the major influencing factors such as income, income structure, urbanization, price, and technological advancement on gasoline and diesel consumption in road transport. Overall, China's fuel consumption is influenced mainly by investment, government expenditure and demographic changes such as urbanization, while the fuel consumption of OECD countries is mainly driven by household final consumption expenditure. In the short run and from a dynamic perspective, China's fuel consumption is less influenced by its historical consumption than current influencing factors, while that of OECD countries is more affected by historical fuel consumption. Based on the analysis and findings of this study, some policy implications are proposed.

Food Security of Urban Female-headed Households: Case in Jambi Province, Indonesia

This paper aims to analyze: 1) food security of urban female-headed households (FHH) in Jambi Province, Indonesia; 2) socio-economic factors affecting the food security of urban FHH in Jambi Province. Primary data is raw data from the National Socioeconomic Survey (SUSENAS) Year 2016 in regencies/cities in Jambi Province. Food security of households is analyzed descriptively. The ordinal logistic regression model is used to analyze the socio-economic factors affecting the food security of urban FHH. The results of the study found that: 1) Of the total urban households in Jambi Province, there are 12.69 percent of FHH; 2) The proportion of urban FHH in Jambi Province that is categorized as food secure is 57,62 percent, as vulnerable is 13,33 percent, as questionable is 22,38 percent, and as food insecureis 6,67 percent; 3) Socioeconomic factors that have significant effect on food security of FHH are age, education, and employment status of female head of household, number of household members, education level of household members, and household final consumption expenditure per capita.

Estimating the Economic Effect of Final Consumption Expenditure on NPO: Focused on the 36 Countries of World Input-output Table

Estimating the Economic Effect of Final Consumption Expenditure on NPO: Focused on the 36 Countries of World Input-output Table

PAJAK KARBON, KERUSAKAN KARBON, DAN PERTUMBUHAN EKONOMI DI LIMA BELAS NEGARA SELAMA 27 TAHUN

The purpose of this study is to analyze the effect of carbon tax and carbon damage on economic growth in 15 (fifteen) countries from 1990 to 2017. Based on the results of research by weather scientists who stated that there are 50-500 possibilities to limit global warming at 2 degrees Celsius above average global temperatures from pre-industrial times throughout the 21st century.Global warming is caused by cumulative carbon emissions which continue to increase from year to year, resulting in threats to the world's sustainable development. Therefore carbon production must be limited by imposing a tax on carbon so that economic growth can run normally and even increase.Researchers used the open economy model Y = (C, I, G, NX) namely final household consumption expenditure (C), foreign direct investment (I), government final consumption general expenditure (G), and import export per GDP (NX) for control variables. The researcher also used the Cobb-Douglas Y = (K, L) production function, namely gross capital formation (K) and the ratio of working people per population (L) to the control variable. The data used were panel data in 15 countries that applied Carbon Tax from 1990 to 2017. Researchers used GLS (Generalized Least Squares) estimation to analyze the effect of carbon tax and carbon destruction on economic growth.The result is a carbon tax can stimulate the growth of real gross domestic product per capita and carbon damage hinder economic growth.

Household Final Consumption Expenditure on the Way to the Consumer Lending Model

For the first five months of 2018, household savings moved up merely by 1.3% which is the bottom low for the last several years. Meanwhile, retail lending has been demonstrating an upward trend. The public borrows significantly more than deposits.

The nexus between financial development and poverty reduction in Egypt

Purpose The purpose of this study is to empirically examine the impact of financial development on poverty reduction in Egypt. The paper also investigates whether financial development affects poverty via gross domestic product (GDP) growth. Design/methodology/approach This study uses the autoregressive distributed lag approach to estimate two specifications. The first is dependent on poverty by the ratio domestic credit to the private sector (percentage of GDP) and the second is dependent on the poverty by the ratio liquid liabilities to GDP or M3/GDP. The data are annual and cover the period from 1980 to 2015. Findings In long run, the study finds that relationship between economic growth and poverty is bidirectional. Financial development and poverty (household final consumption expenditure per capita) are complementary as bidirectional (in Granger sense). In short run, the study finds the bidirectional causality between financial development (real domestic credit to private sector per capita) and poverty reduction. Practical implications The findings suggest that governments should remove policies that impede the ability of banks to offer loan products or undermine the commercial incentive structure for banks or borrowers. It is crucial to enhance the role of specialized state-owned banks in financial intermediation. Social implications Several attempts have been made to investigate the relationship between financial development and other macroeconomic variables, but few studies have examined the impact of financial development on poverty reduction. Furthermore, the majority of the previous studies are based on Asia and Latin America – affording Egypt very little or no coverage at all.

Driving forces and structural changes of China as a market provider for Korea

PurposeThe purpose of this paper is to provide a better understanding of the driving forces and structural changes of China as a market provider for Korea. This paper gives the answers for the following questions: How do China’s final demands trigger the growth of its imports from Korea? And what’s the impact of China’s final demands on the import in different industries?Design/methodology/approachBased on the Multi-Regional Input-Output model and World Input-Output Table database, this paper constructs the non-competitive imports input-output (IO) table of China to Korea. According to this table, we can calculate the induced imports coefficient and comprehensive induced import coefficients of China’s four final demands for imports from Korea in the 56 industries in China.FindingsAmong the four driving forces, the strongest one is changes in inventories and valuables. The impact of final consumption expenditure and fixed capital formation is much lower than that of changes in inventories and valuables, but they have a broader impact for the 56 industries. This paper finds out the China’s import induction of the final demands to Korea peaked in 2005 and 2010 and decreased greatly in 2014, so the position of China as market provider for Korea will no longer rise substantially, contrarily it will be in a steady state.Originality/valueFirst, this paper constructs the non-competitive IO table to analyze the market provider issues between two countries and provides practical ways and methods for studies on the issues of imports and market provider. Second, this paper investigates the different roles of four final demands on driving force of China as market provider for Korea and the structural changes of China as a market provider for Korea among 56 industries from 2000 to 2014.

Population age structure and consumption expenditure composition: Evidence from European countries

This paper aims at evaluating the effect of population age structure on households’ aggregate preferences and, through this channel, on the sectoral composition of the final consumption expenditure. The analysis of European COICOP 2-digit data shows that the contribution of demographic dynamics to model fit is highly relevant, only slightly lower than the contribution of the income effect.