Public Consumption Expenditure Research Articles

The Impact of Coronavirus Pandemic on Private and Public Consumption Expenditure

The Impact of Coronavirus Pandemic on Private and Public Consumption Expenditure

Assessing the Effects of Macroeconomic Variables on Economic Welfare in Ghana

This study employs the Auto-Regressive Distributed Lag (ARDL) bounds approach to investigate the relationship between Real GDP, which serves as an estimator of a nation’s economic performance, and selected macroeconomic variables. Using data from the World Bank Development Indicators spanning the period from 1993 to 2022, our analysis reveals distinct patterns in the interplay between inflation, labour productivity, public consumption expenditure, and real GDP. The results highlight the negative impact of inflation on economic well-being. Conversely, a positive correlation emerges between real GDP and both labour productivity and public consumption expenditure. These findings contribute nuanced insights to the ongoing discourse on the appropriateness of Real GDP. The observed negative influence of inflation on Real GDP underscores the importance of vigilant inflation management for sustained economic stability. On the other hand, the positive association between real GDP and labour productivity, as well as public consumption expenditure, implies potential avenues for fostering economic growth and prosperity. These findings not only enhance our understanding of the dynamic interactions within economic systems, but also challenge conventional perspectives on real GDP as an indicator of economic health. These insights provide valuable considerations for crafting effective policies that go beyond GDP figures to ensure holistic and sustainable national economic well-being.

PENGARUH KINERJA PEREKONOMIAN TERHADAP KUALITAS LINGKUNGAN HIDUP DI INDONESIA

The purpose of this study is to analyze the impact of economic performance which consists of growth in per capita income, Human Development Index, Public Consumption Expenditure, and Poverty Level on Environmental Quality in Indonesia (EQI). This study focuses on 34 provinces in Indonesia from 2016 to 2020 using the panel data analysis method. Data was obtained from the Statistics Processing Agency (BPS) and Bank Indonesia (BI). The regression results show that economic growth, public consumption spending, and the poverty rate do not affect the environmental quality index and only the Human Development Index which has a positive effect on environmental quality, especially from the high education component forming a society that is intellectually educated and has a lifestyle that is influential in terms of consumption of environmentally friendly products.

Toward a green income support policy: investigating social and fiscal alternatives for Turkey

AbstractThe limited success of employment-based social protection measures under the diverging patterns of post-COVID-19 recovery rekindled interest in a social policy framework known as the Basic Income (BI) support. We test the potential of the BI program using five alternative scenarios ranging from households with income less than half of median income to all adults with estimates of their respective fiscal costs. We then employ an applied general equilibrium model to analyze the economy-wide effects and welfare implications for Turkey in the long run through 2030. We evaluate the macroeconomic and welfare effects of both a business-as-usual fiscal program and an alternative (green BI scenario) comprising of (i) carbon tax levied on the fossil fuel producing industry; (ii) corporate income taxation policy reform that aims at expanding the revenue base and consolidation of the fiscal space of the government; and (iii) restructuring of public consumption expenditures by introducing rationality and efficiency in the structure of fiscal expenditures. Our model solutions reveal that a green BI scenario not only achieves a higher GDP and welfare in the medium to long run but also helps Turkey to reduce its carbon emissions in line with the global policy challenges of a green recovery.

The Effect of The Use of Debit Cards and Electronic Money (E-Money) on Public Consumption Expenditures in Pematangsiantar City

This study aims to determine the effect of the use of debit cards and electronic money (e-money) on public consumption expenditure of Pematangsiantar City. The population in this study are Pematangsiantar City people who have debit cards and electronic money (e-money). The sampling technique used in this study was purposive sampling technique. The number of samples is 100 respondents. This study uses primary data obtained from a questionnaire and then analyzed by multiple linear regression. Based on the results of the t test (partial), there is a significant influence between the use of a debit card on the consumption expenditure of Pematangsiantar City. Furthermore, the use of electronic money (e-money) has a significant effect on the consumption expenditure of the Pematangsiantar City community. Based on the test results of the coefficient of determination (Adj R2), the value was 0.638 (63.8%). This shows that the variations in consumption expenditure of Pematangsiantar City can be explained by debit cards and electronic money. While the remaining 36.2% is explained by other factors not included in this study. This is because non-cash payments are easy to use and psychologically, it is easier for anyone to spend their money in cash than in cash. The results of this study indicate that the people of Pematangsiantar City are consumptive, especially those under 40 years of age. There is a need for increased socialization regarding non-cash transactions, because it cannot be denied that in the Pematangsiantar City area there are still some people who do not quite understand non-cash transactions, especially those aged 40 years and over.
 Keywords: e-Money; debit cards; public consumption

Do Public Expenditure and Macroeconomic Uncertainty Matter to Private Investment? Evidence from Pakistan

This study examines the role of macroeconomic uncertainty and public expenditure in determining private fixed investment in Pakistan. It is found that individual series are nonstationary. There is a long-run relationship between private fixed investment, public consumption expenditure, public development expenditure, and market activities. It is revealed that public development expenditure stimulates private investment, whereas public consumption expenditure is detrimental to private investment. The preferred dynamic private fixed investment function confirms that in the short run, public development expenditure enhances private investment. Moreover, macroeconomic instability and uncertainty depresses private investment in Pakistan.

Wagner’s Law vs. Keynesian Hypothesis: Dynamic Impacts

This study analyzes the dynamics between public expenditure and economic growth in Peru for 1980Q1–2021Q4. We used quarterly time series of real GDP, public consumption expenditure, public expenditure, and the share of public expenditure to output. The variables were transformed into natural logarithms, wherein only the logarithm of public expenditure to output ratio is stationary and the others are non-stationary I1. The study of stationary time series assesses whether Wagner’s law, the Keynesian hypothesis, the feedback hypothesis, or the neutrality hypothesis is valid for the Peruvian case according to Granger causality. We found cointegration between real GDP and public expenditure, and public consumption expenditure and real GDP. Estimating error correction and autoregressive distributed lag models, we concluded that Wagner’s law and the Keynesian hypothesis are valid in the Peruvian case, expressed as dynamic processes that allow us to obtain short-run and long-run impacts, permitting the mutual sustainability of economic growth and public expenditure.

COVID-19 in US Economy: Structural Analysis and Policy Proposals

Based on an input–output framework, this paper analyses the intersectoral structure of the US economy and estimates the COVID-19 multiplier effects on this economy. For this purpose we employ a model of matrix multipliers—which, except for the technical conditions of production, also considers imports, income distribution, savings, and consumption patterns—using data from the input–output table of the US economy for the year 2015, i.e., the latest available data at the time of this research (a few months after the US presidential election). Furthermore, we detect the key commodities that are considered appropriate for implementing economic policies in the short term, i.e., for boosting growth and job creation, as well as the commodities that are suitable for long-term, structural policies. Our findings suggest that short-term policies for a direct recovery after COVID-19 should be based on public consumption expenditures and investments as well as through exports. It is also shown that there is a great variety of short-term and long-term policies that can be adjusted according to the challenges of the US economy. Finally, for reasons of completeness, we estimate the impact of the main plans of the American president’s policy program, i.e., the “American Jobs Plan and the American Families Plan”, and we show that both plans would cumulatively increase the US output by about USD 6.07 trillion over the next ten years, not only helping the US economy recover from the COVID-19 shock but also ensuring macroeconomic stability and social cohesion.

Analysis of Public Consumption, Population Growth, and Government Expenditure on the Economic Growth in North Sumatera Province

This study aims to examine and analyze the effect of public consumption, population growth and government spending in North Sumatra Province. The types of data used in this research are quantitative and secondary data. The objects in this study consisted of 33 regencies/cities in North Sumatra. This study uses panel data (Pooled Data), which combines Time Series and Cross-Section data for six years, starting from 2015-to 2020. The analytical method used in this research is the panel data analysis method with the Random Effect Model (REM) approach, using the Eviews ten estimation tool. The regression results show that public consumption and population growth have a positive and insignificant effect on economic growth partially. Meanwhile, government spending has a negative and significant impact on the economic growth of 33 Regencies/Cities in North Sumatra during the 2015-2020 period. Keywords: Economic Growth, Public Consumption, Population Growth, Government Expenditure .

CHANGES IN HOUSEHOLD AND GENERAL GOVERNMENT CONSUMPTION AND SAVINGS DURING THE COVID-19 PANDEMIC IN THE EUROPEAN UNION

In March 2020, the COVID-19 pandemic caused a significant economic shock in countries worldwide, negatively affecting every aspect of the world economy. Due to the situation with the COVID-19 pandemic, governments imposed a lockdown on households to slow the spread of the pandemic. It was unknown how long the lockdown could last and how much impact it would have on households and the general government. Household consumption is a specific component of final GDP consumption and generally represents about 60% of GDP. Crises most often affect the individual and manifest in unplanned and unnecessary costs that affect household consumption and savings, and consequently growth and development. Eurostat states that the household savings rate of the European Union (EU) decreased in the third quarter of 2020 but was 4.5% higher than in 2019. This paper aims to analyze the differences in household consumption expenditure and net savings across the EU from 2018 until 2021 and general government consumption expenditure and net savings. In addition, it will compare the differences in household and general government consumption and savings in 2019 and 2020. This paper uses univariate statistical methods to define the differences between the EU member states and their private and public consumption expenditure and net savings. The authors will suggest further research on the topic mentioned above and provide evidence on how households should react to future pandemic situations.

Telafi ve Etkinlik Hipotezleri Temelinde Küreselleşme ve Kamu Harcamaları İlişkisi

The study, which deals with the changes created by the globalization indicators on the public sector, is shaped on the basis of the compensation and efficiency hypothesis. In this context, it has been investigated how the government size is affected due to the fact that the effects of globalization are felt more with the shift of transition countries from centrally planned economy to free market economy. According to panel OLS and causality test results, increases in economic freedom index, one of the globalization indicators, decrease public consumption expenditure. In this context, the efficiency hypothesis is valid for Albania, Bulgaria, Czechia, Estonia, Romania and Slovakia for the period 1995-2019.

The Asymmetric Effects of Argentina’s Fiscal Deficits on the Real Exchange Rate

ABSTRACT According to standard theoretical frameworks such as Real Business Cycle (RBC’s) models or new-Keynesian theories, the real exchange rate should appreciate in response to an increase in government spending. However, the empirical literature finds mixed results. We offer an answer to this puzzle by analyzing the impact of the composition of the fiscal deficit. Using a dynamic stochastic general equilibrium model with a government and an external sector, we quantify the differential impact on the real exchange rate generated by an increase in public consumption expenditure, public investment, and tax reduction. We calibrate and simulate the model for Argentina and find that the fiscal deficit originated in tax reduction can improve the real exchange rate. In contrast, one generated by an increase in spending deteriorates the real exchange rate. In particular, this depreciation is more significant when the spending is directed toward public consumption than when used for public investment. We argue that quantifying these different effects on the exchange rate within a dynamic stochastic general equilibrium framework is an essential exercise of political economy for highly dollarized emerging economies that exhibit higher inflation pass-through.

Impact of Public Consumption on Economic Growth

Faced with the financial crisis and global economic recessions, Africa governments have rediscovered the importance of economic policy instruments. They use it to rescue the bankrupt banks, and to make more economic activity to carry back recession. But now there's a backlash demanding that the deficits used to create the stimulus must be reduced by cutting public consumption spending on a grand scale. Hence the target of this study is to explore the role of public consumption expenditure on economic process in East African geographic region. The study will use panel ordinary least square estimation technique to attain the study objective. The study has identified consumption expenditure to be negatively associated with growth. This study recommends few funds should be channeled to public consumption programmes and sectors.

Self-correcting error-based prediction model for the COVID-19 pandemic and analysis of economic impacts

In order to improve the prediction accuracy of COVID-19 and strengthen the economic management and control, a self-correcting intelligent pandemic prediction model is proposed. The research shows that: (1) The pandemic, as a major social factor, has a great impact on the consumption expenditure level of various industries, and directly affects the public consumption expenditure level in different periods for example the spend_all in California decreased by 37.7%; (2) The economic losses caused by the increasingly serious pandemic period far less than the economic losses caused by the panic in the early stage of the pandemic, and the reason is the government's strong guarantee policies stimulate economic recovery. For example, the spend_all in California has increased from -37.7% to about -18%; (3) The proposed model improves the prediction accuracy of economic trend, and the government can make prediction according to the early warning economic prediction, which provides reference for the economic management control at the micro level of enterprises and the macro level of the nation; (4) The dual strategies of self correcting prediction and pandemic control realize the overall design of real-time control and performance optimization of economic process, and provide reference for the overall recovery of the economy.

A Russian approach to ensuring economic growth

Subject. The article investigates a Russian approach to ensuring economic growth. Objectives. The aim is to identify the basis of the Russian approach to ensuring economic growth. Methods. The study rests on the systems approach, using the methods of statistical, neural network, and cluster analysis. Results. The paper defines the structural importance of exports of goods and services, and changes in inventories. It highlights significant links with public consumption expenditures. The Russian approach to ensuring economic growth comes down to devaluation of the national currencyб resulting from the loss of the real inflationary potential of economic growth to maintain the volume of exports of goods and services in the context of maintaining public consumption expenditures. The increase in M2 forces the Central Bank of the Russian Federation to increase its foreign exchange reserves. This has a restraining effect on the growth of Russian Ruble’s monetary exchange rate. This phenomenon causes a drop in the Russian federal loan bond (OFZ) index and a replacement of strategic priorities with tactical ones. Conclusions. The basis of the Russian approach to ensuring economic growth is a reflection of the limits of the Russian economy development and the effectiveness of the Government of the Russian Federation.

Does Foreign Debt have an Impact on Indonesia's Foreign Exchange Reserves?

Indonesia as one of the emerging market countries’ utilization of external resources of foreign debt to a boost in increasing economic growth in addition to international trade that supports accelerated growth Economy. Using time-series data of the period 1988-2017 and using the simultaneous approach of Two-Stage Least Square (TSLS), the research results find out and showed that the foreign debt and reserves have a two-way relationship. The study findings that macroeconomic variables of significant investment affect foreign debt and consumption expenditures significantly affect foreign exchange reserves. It as a basic contributor to monetary policymaking by the government in reducing foreign debt by utilizing investment in sustainable economic development and improving the performance of international trade net exports as well as public consumption expenditures thus supporting the acceleration in increasing foreign exchange reserves.

Does Foreign Debt have an Impact on Indonesia's Foreign Exchange Reserves?

Indonesia as one of the emerging market countries’ utilization of external resources of foreign debt to a boost in increasing economic growth in addition to international trade that supports accelerated growth Economy. Using time-series data of the period 1988-2017 and using the simultaneous approach of Two-Stage Least Square (TSLS), the research results find out and showed that the foreign debt and reserves have a two-way relationship. The study findings that macroeconomic variables of significant investment affect foreign debt and consumption expenditures significantly affect foreign exchange reserves. It as a basic contributor to monetary policymaking by the government in reducing foreign debt by utilizing investment in sustainable economic development and improving the performance of international trade net exports as well as public consumption expenditures thus supporting the acceleration in increasing foreign exchange reserves.

Corruption control, shadow economy and income inequality: Evidence from Asia

Developing countries often suffer from high corruption, high income inequality and poor institutional arrangements that give rise to large shadow economies. Earlier evidence shows that shadow economies moderate the negative effects of corruption on income inequality in highly unequal South American countries. For Asia, we show that the persistence of shadow economies raises inequality even if corruption control is strong. Supported by static and dynamic panel data analyses of 21 countries in Asia between 1995 and 2015, we show that in order to combat rising inequality, corruption control must be complemented by the ability to translate secondary and tertiary school enrolment into industrial and, more importantly, service sector jobs. Countries with low corruption but high inequality can reduce inequality by committing to higher public consumption expenditures. Further, combining greater trade openness with low corruption lowers inequality, except for countries in South Asia.

Financial Development and Income Inequality Relationship: Analyzing Financial Kuznets Curve with ARDL Boundary Test in Turkey

In this study, the relationship between the financial development and the income inequality in Turkey is investigated by testing the validity of Financial Kuznets Curve Hypothesis. To examine this relationship for the period of 1987 2017, the variables of the public final consumption expenditures, the modern sector share, the inflation and the human capitalare also added to the model setted as control variables, and the long term relationships among the variables are analyzed by using the ARDL (The Autoregressive Distributed Lag) Boundary Test approach. Empirical evidence refers to the validity of the Financial Kuznets Curve Hypothesis in Turkey, in other words, there is an inverse U shaped relationship between the financial development and the income inequality. Accordingly, while the financial development raises the inequality in income distribution to a certain threshold level, it reduces the inequality after this threshold level in Turkey. Moreover, in the long run increases in the modern sector share, the public final consumption expenditures and in the trade openness help to reducing income inequality but increases in the inflation and in the human capital make worse income inequality. Keywords: Financial Development, Income Inequality, Financial Kuznets Curve, ARDL Boundary Test. DOI: 10.7176/JSTR/7-01-07

DETERMINAN PERTUMBUHAN EKONOMI DAN DAMPAKNYA TERHADAP INDEKS PEMBANGUNAN MANUSIA DI PROVINSI SUMATERA BARAT

Th is research objective was to determine the effect of household consumption, investment in human resources in education, population, PAD and DAU on economic growth and their impact on the human development index simultaneously and partially. The results showed that: An increase in household consumption affects an increase in economic growth, so policies are needed, so that the real sector growth that is more optimal should be more directed at the development of the primary and secondary sectors, especially in the development of manufacturing industries based on local resource potential, which will produce output specific local and local product demand as an effort to increase public consumption expenditure. A n increase in the level of human investment in education affects an increase in economic growth, so the willingness of the government is needed to implement budget allocation priorities in the education sector efficiently. It does not differentiate physical development for public schools and private schools in physical development The increase in the amount of PAD affects the increase in economic growth, as regional governments are expected to be more focused on exploring and developing the potential that exists in the respective districts / cities in the West Sumatra Province. Among other things, efforts that can be made to improve the regional economy through the optimization of regional economic potential are by preserving the environment and supporting tourism, especially in the sector of providing accommodation as well as food and beverage, restaurants and hotels. A mount of DAU affects the increase in economic growth, for local governments it is hoped that more optimizing the allocation of the General Allocation Fund (DAU). To the Regency / City Government of West Sumatra Province, in order to prioritize the DAU allocation in areas that are directly in contact with the public interest, such as infrastructure or facilities that can encourage economic growth. Economic Growth affects the increase in the Human Development Index, to improve human development in the Regency / City of West Sumatra Province, the government must facilitate education, health and economic infrastructure, so that in this case it is expected to increase the value of the human development index in order to improve the quality of human resources to spur economic growth by prioritizing excellent service in education, health and economic development. Keywords : Household consumption, human resource investment in education, population, PAD, DAU, Economic Growth, and Human Development Index.