Long-term Dynamic Relationship Research Articles

Multi-scenario simulation of China's dynamic relationship between water–land resources allocation and cultivated land use based on shared socioeconomic pathways

Rapid urban expansion, population growth, and limited cultivated land in China necessitate rethinking the path to sustainable management of cultivated land. Understanding the long-term dynamic relationship between water–land resource endowment and cultivated land use contributes to effective management and use of cultivated land. However, few studies have systematically documented this relationship, especially for future trends. Accordingly, we modified water–land resource matching (WLRM) using a more refined grid-scale and assessed cultivated land use efficiency (CLUE), then deployed spatial panel regression models to quantify historical changes. We subsequently simulated future trends under three Shared Socioeconomic Pathways scenarios. The results showed that the relationship assumed an N-shaped curve in nation, while the curve followed a down–up–down pattern in economically less developed regions, largely because of structural transformations of production factors. Under three development scenarios, the stage-specific characteristics of production factors were pronounced, and the dynamic relationship varied across regions.

The long-term dynamic relationship between communicable disease spread, economic prosperity, greenhouse gas emissions, and government health expenditures: preparing for COVID-19-like pandemics.

The spread of communicable diseases, such as COVID-19, has a detrimental effect on our socio-economic structure. In a dynamic log-run world, socio-economic and environmental factors interact to spread communicable diseases. We investigated the long-term interdependence of communicable disease spread, economic prosperity, greenhouse gas emissions, and government health expenditures in India's densely populated economy using a variance error correction (VEC) approach. The VEC model was validated using stationarity, cointegration, autocorrelation, heteroscedasticity, and normality tests. Our impulse response and variance decomposition analyses revealed that economic prosperity (GNI) significantly impacts the spread of communicable diseases, greenhouse gas emissions, government health expenditures, and GNI. Current health expenditures can reduce the need for future increases, and the spread of communicable diseases is detrimental to economic growth. Developing economies should prioritize economic growth and health spending to combat pandemics. Simultaneously, the adverse effects of economic prosperity on environmental degradation should be mitigated through policy incentives.

Keeping an eye on environmental quality in Tanzania as trade, industrialization, income, and urbanization continue to grow.

By applying the ARDL (autoregressive distributed lag) bounds testing method, this study examines the short- and long-term dynamic relationship between carbon dioxide (CO2) emissions, economic growth (gross domestic product), industrialization, trade, and urban population in Tanzania from 1990 to 2020. The study found that economic growth, trade, industrialization, and the urban population all contributed to the increase in environmental degradation (i.e., carbon dioxide emissions). However, we found that financial credit (i.e., domestic credit to the private sector) reduces carbon dioxide emissions, and its effects are significant in EKC (environmental Kuznets curve) model. Our findings revealed that economic growth (i.e., income) was responsible for both short- and long-term increases in carbon dioxide emissions in Tanzania. Economic growth is harmful to the environmental quality above a threshold value of 6.23%. Furthermore, the environmental Kuznets curve hypothesis is confirmed for Tanzania. Our findings suggest that policymakers should monitor and use the threshold levels to manage carbon dioxide emissions and to protect the environmental quality. Further, a strong focus should be placed on formulating environmental policies (i.e., carbon tax policy) as industrialization, urban population, economic growth, and trade continue to grow in future, restricting carbon dioxide emissions and safeguarding the environment.

Long term equity risk premiums in the UK and US: A cautionary tale of weak mean reversion

It is well established in the literature the ex post risk premium is higher than the ex ante risk premium and can vary substantially, but little research has been conducted in modelling the dynamic process between the two. This paper contributes by providing a theoretical framework to model the long-term dynamic relationship between the two risk premia in the UK and US. Using an Ornstein-Uhlenbeck (OU) ex ante model, that dominates several competitive models, we reveal slow reversion toward a stable long term ex post mean of 4% in both the UK and US markets. Results extend prior research by using an extended data set (1923–2019), providing a more precise and flexible estimation model, confirming that inflation and interest rates provide additional explanatory power over the long term but significantly less so across several regime shocks, especially during high inflation and periods of negative risk premia. By highlighting potential mispricing through a flexible approach we provide financially useful information to investors and regulators, particularly when central banks are manipulating equity prices.

Asymmetric between oil prices and renewable energy consumption in the G7 countries

Understanding the dynamic relationship between oil prices and renewable energy is beneficial to promoting the development of the renewable energy market and the transition from fossil fuels to renewable energy, which will finally protect the environment. Based on the data of G7 countries from 1980 to 2018, this paper analyzes the short-term and long-term dynamic relationship between oil prices and renewable energy consumption (REC) by using linear and nonlinear autoregressive distributed lag models under the condition of structural fractures and then discusses its asymmetric characteristics. The results show that, except for France and Germany, the oil prices of other countries have a significant asymmetric effect on REC, but there is great heterogeneity between the countries. Specifically, in Canada, the U.S., and Italy, a positive change in oil prices has a greater impact on REC than a negative change, whereas in England and Japan, the results are just the opposite. Therefore, based on the heterogeneity between countries and the long- and short-term dynamic relationships reflected in the research results, this paper further discusses the policy implications.

Time Series Analysis for the Dynamic Relationship between an Enterprise’s Business Growth and Carbon Emission in Taiwan

Since the Paris Agreement came into effect in 2016, governments worldwide have established goals for future carbon emission reduction. Enterprises and governments have begun to pay attention to the management of carbon emission. This study explored the dynamic relationship between business growth and carbon emission performance by constructing and using a time series model to predict the trend of carbon emission. The time series method (ADF unit root test, cointegration test and VAR model etc.) was adopted to investigate 805 companies listed on the Taiwan Stock Exchange from 2012 to 2017 as the sample of this study. The carbon emission performance variables include: total carbon emission, annual increase of carbon emission, and annual increase rate of carbon emission. The business growth variables include: growth rate, stability of growth, and years of establishment. The results showed a long-term dynamic relationship between business growth and carbon emission performance. Therefore, using the time series method can assist enterprises in developing green strategies, strengthen carbon emission prediction and management capacities, reduce operating costs and risks, and actively achieve the ideal of sustainable development.

Teen Parents’ Cumulative Inequality in Job Achievement: Mediation Effect of Educational Achievement

Abstract Teen pregnancy remains an important societal concern in the United States because teen pregnancy tremendously influences teen parents in terms of opportunities for education and employment. However, little is known about the long-term dynamic relationship between the trajectory of educational attainment and trajectory of job achievement among teen parents. This study examined the sample of National Longitudinal Survey of Youth 1997, which comprises representative American youths born between 1980 and 1984 (N = 7,771). Latent growth models revealed that teen parents had not only lower initial educational levels, hourly compensation, and annual wages, but also lower increases in educational level, hourly compensation, and annual wages over 10 years. Also, the latent growth mediation model found that initial educational level and changes in educational level mediated the negative association between teen parents and job achievement. These findings suggest that social work intervention for teen parents should focus on supporting academic success in the long term and providing appropriate employment training programs for better job achievement. Future research may contribute by examining the long-term effect of being a teen parent beyond 10 years and investigating differences between teen mothers and teen fathers.

Kamu ve Özel Sektör Yatırımlarının Dinamik Etkileri: Altı Gelişmiş Ülke VAR Örneği

This paper investigates the long-term dynamic relationship between public and private investments and evaluates their impacts on economic activity in six advanced economies; France, Germany, Japan, Belgium, the United Kingdom and United States by a VAR framework. The related literature mostly considers the contribution of public investment to the formation of private investment and economic activity. This paper also evaluates the other way around: impacts of private investment on the formation of public investment and economic activity. Orthogonal identification assumptions are imposed to have an interpretable causal impulse-response functions. The empirical results provide evidences that public investment significantly contribute to private investment; however, the reverse is not true. More importantly, private investment always contributes more to output growth and employment than public investment.

Analysis of Dynamic Correlation Between Economic Growth and WaterConsumption in China Based on VAR Model

China is a country with severe water shortage. With rapid urbanization and industrialization, the significance of water resources to economic growth is increasing. And because of the high exploitation of economic activities, the water resources consumption in China is keeping increasing. Here, in order to investigate the water use situation, we studied the relationship between water use and economic growth based on the VAR (Vector Auto Regression) model. Through the co-integration test, generalized impulse response and predictive variance decomposition analysis between them, we aim to reveal the long-term dynamic relationship between water resources utilization and economic growth. Then, we used the main water system related indicators and GDP data from 2003 to 2017 to predict and analyze the overloaded state of water use in 2017-2025. Our results show that: (1) During the study period, China's economic growth has a co-integration relationship with total water consumption. (2) The cumulative value of GDP response to total water consumption per unit is negative, while the cumulative value of total water consumption response to GDP is positive. (3) In 2025, sewage discharge will be 8.5×1010t, which is about 1.8 times larger than that of 2003. Therefore, we should build more sewage treatment facilities and adopt other measures to alleviate the situation of water overload.

The Interactive Relationship between Sci-Tech Innovation and Economic Growth: An Empirical Study Based on China Macroeconomic Data

In the past decades, China has embraced a rapid development in its economy. And the sci-tech innovation has also gained unprecedented prosperity during the period. The progress in sci-tech innovation has boosted larger output in multiple industries of China, and thus having great contributions to the dramatic improvement in China’s economy. The studies on the relationship between sci-tech innovation and economic growth has long been existed, however, most of which only focus on the one-way research, namely the effects of sci-tech innovation on the economic growth. Based on this status quo, this paper innovates from the research method to focus on the interactive relationship between sci-tech innovation and economic growth, establishing a VAR model to analyze their immediate structural relationship and long-term dynamic relationship, and finds out that the effects of sci-tech innovation on economic growth are immediate positive, while those on sci-tech innovation achievements appear in the long run. In the last part, this paper puts forward policy suggestions on the maximization of sci-tech innovation and economic growth based on the results.

The Long-Term Dynamics of Partisanship and Issue Orientations

Partisanship and issue orientations are among the foundational concepts for behavioral researchers. We seek to understand their causal relationship. One view suggests that party identification, as a central and long-standing affective orientation, influences citizens’ issue positions. Another view claims that issue orientations influence party identification. We take both theories into account in this article and argue that the direction of causality may depend upon the political context. Using the Political Socialization Panel Study, we analyze the long-term dynamic relationship between partisanship and issue orientations. The results from our cross-lagged structural equation models are inconsistent with a single, time-invariant, unidirectional causal story. The causal relationship between partisanship and issue orientations appears to depend upon the larger political context. In the early period from 1973 to 1982, partisanship causes issue orientations. In the later period, from 1982 to 1997, the causal arrow is reversed, and issue orientations significantly shape partisanship.

An investigation of long-run dynamic relationship of Korean and Indian futures indexes

We investigate the nature of the long-term dynamic relationship between the futures indexes of Korea and India. Both the Kospi 200 futures index and Nifty futures index are found to be non-stationary and cointegrated, meaning thereby that a long-term dynamic equilibrium relationship exists between them along with a Granger cause bidirectional relationship. The VECM results indicate that a lagged relationship exists between the two indexes. While lag 1 and lag 3 are statistically significant for Kospi 200 futures – Nifty futures, lag 4 and lag 6 are significant for Nifty futures – Kospi 200 futures. It is suggested that while information on Kospi 200 futures is more instantaneously discounted by the Nifty futures, the information on Nifty futures is relatively slowly discounted by the Kospi 200 futures index. The impulse response analysis suggests that the price discovery process is more efficient for Kospi 200 futures index than for Nifty futures index.

An Empirical Investigation of the Causal Relationship among Monetary Variables and Equity Market Returns

This study explores the long-term dynamic relationship between equity prices and monetary variables for the period June 1998 to June 2008. Monetary variables include money supply, treasury bill rates, foreign exchange rates, and the consumer price index. The data have been examined using multivariate cointegration analysis and Granger causality analysis. Johansen and Juselius’ multivariate cointegration analysis indicates the presence of a long-term dynamic relationship between the equity market and monetary variables. Unidirectional Granger causality is found between monetary variables and the equity market. In the case of money supply, a positive relationship supports the liquidity hypothesis. Impulse response analysis indicates that the interest rate shock has a negative impact on equity returns in the Pakistani equity market. Exchange rates also have a negative impact on equity returns in the short run. However inflation has little impact on returns in the equity market. Variance decomposition analysis suggests that the interest rate, exchange rate, and money supply shocks are a substantial source of volatility for equity returns.

Test FOR Dynamic Relationship between Financial Development and Economic Growth in Malaysia: A Vector Error Correction Modeling Approach

This paper purports to study the effectiveness of financial development to Malaysian economic growth utilizing quarterly data. In view of the priority given to dynamic relationship in conducting this study, Vector Autoregressive (VAR) method which encompasses Johansen-Juselius’ Multivariate cointegration, Vector Error Correction Model (VECM), Impulse Response Function (IRF), and Variance Decomposition (VDC) are used as empirical evidence. The result reveals a short-term and long-term dynamic relationship between financial development and economic growth. The importance of financial sector in influencing the economic activity is proven as a clear policy implication.