Immigration,unemployment and GDP in the host country: Bootstrap panel Granger causality analysis on OECD countries

This paper examines the causality relationship between immigration, unemployment and economic growth of the host country. We employ the panel Granger causality testing approach of Kònya (2006) that is based on SUR systems and Wald tests with country specific bootstrap critical values. This approach allows one to test for Granger-causality on each individual panel member separately by taking into account the contemporaneous correlation across countries. Using annual data over the 1980–2005 period for 22 OECD countries, we find that, only in Portugal, unemployment negatively causes immigration, while in any country, immigration does not cause unemployment. On the other hand, our results show that, in four countries (France, Iceland, Norway and the United Kingdom), growth positively causes immigration, whereas in any country, immigration does not cause growth.     

IMMIGRATION UNEMPLOYMENT RELATIONSHIP: THE EVIDENCE FROM CANADA*

This paper examines the relationship between unemployment and immigration in Canada. The bi‐directional causality test finds no evidence of a significant effect of Canadian immigration on unemployment. Cointegration tests indicate that there is no observed increase in aggregate unemployment due to immigration in the long run. The results from the causality test based on the vector error correction model confirm that, in the short run, past unemployment does cause (less) immigration but not vice versa. There is also a long‐run positive relationship among per‐capita GDP, immigration rate and real wages. The results indicate that, in the short‐run, more immigration is possibly associated with attractive Canadian immigration policies, and in the long‐run, as the labour market adjusts, Canadian‐born workers are likely to benefit from increased migration.     

Immigration and Unemployment*

The wisdom of maintaining high levels of immigration into Australia has been questioned, particularly on the grounds that migration contributes to aggregate unemployment. This paper uses both statistical causality techniques and conventional structural models to investigate the relationship between immigration and unemployment in the post-war period in Australia. The tests find no evidence of any association from migration to unemployment, though there is strong evidence of a significant effect of Australian unemployment on migration. The results indicate that immigration policy should not be dictated by unfounded fears of immigration causing unemployment, at least over the range of previous Australian experience.     

Defence spending,economic growth and temporal causality: evidence from Taiwan and mainland China, 1952-1995

This paper uses a cointegration analysis and a vector autoregressive model (VAR) to examine the causal relationship between defence spending and economic growth for Taiwan and Mainland China over the period 1952–1995. It is found that these two variables are not cointegrated for both countries studied. The results of the Granger causality tests suggest bidirectional Granger causality (feedback) between defence spending and economic growth for Taiwan, unidirectional Granger causality running from economic growth to defence spending for Mainland China, and unidirectional Granger causality running from Taiwan's defence spending to Mainland China's defence spending for cross-country studied. These results further indicate that there exists no arms race between two countries from both sides of Taiwan strait. Furthermore, impulse responses and variance decompositions are incorporated into the analysis. The results from the impulse responses and variance decompositions tell a similar story.     

Macroeconomic Determinants of Crime: Evidence from India

This paper examines the relationship between crime, inflation, unemployment, and real GDP per capita in India. Based on the national-level data, the Johansen cointegration test confirms the presence of cointegration relationship between the variables. The Toda–Yamamoto Granger causality test suggests that macroeconomic indicators, especially unemployment, can significantly affect crime in India. Based on the state-level data, the ordinary least squares results corroborate the effect of inflation on crime even after controlling for governance. However, they fail to verify the relationship between crime, unemployment, and real GDP per capita.

     

International trade and technological progress in china: Evidence from time series

Using annual time series data (1983–2007), this paper examines the nexus between international trade and technological progress in China. The time series properties of the data are analyzed by bounds testing approach and vector error-correction model. The empirical results show that, it is not international trade volume and export trade volume but the import trade volume that is cointegrated with total factor productivity. The paper also finds that, in the long run, there is a reciprocal Granger causal relationship between the change of import trade volume and the change of total factor productivity, and in the short run, there is no evidence to support the Granger causality between these changes of the two variables.     

INTERACTIONS BETWEEN WELFARE CASELOADS AND LOCAL LABOR MARKETS

This paper provides an empirical examination of interactions between welfare caseloads and local labor markets using data on caseload stocks, entries, and exits. Granger‐causality tests show that unemployment rates Granger‐cause caseload activity but caseload activity does not Granger‐cause unemployment rates. The results also reveal differential dynamics between caseloads and labor market conditions for rural versus metropolitan markets. Several models of one‐way association between caseload activity and unemployment rates are presented. The results show that higher unemployment rates are positively associated with welfare caseloads and entries and negatively related to exits. (JEL I38, R23)     

Migration and labour markets in OECD countries: a panel cointegration approach

This article examines the interaction between immigration and the host labour market of 14 Organization for Economic Co-operation and Development (OECD) countries using nonstationary panel data methodology. We estimate a trivariate Vector Error Correction Model (VECM) and derive causality tests to simultaneously assess the long- and short-term macroeconomic impact of newcomers on wages and unemployment levels in the host country. The results suggest that an increase of migrants is likely to increase wages in the destination countries in the short run but to increase them in the long run. There is no evidence of adverse effects on unemployment due to immigration in short and long-term except for Anglo-Saxon countries in the short term. Our findings also show that immigration is conditioned by levels of unemployment and wages especially in Anglo-Saxon countries.     

On the Causality Between Exchange Rates and Stock Prices: A Note

This study uses a new Granger non–causality testing procedure developed by Toda and Yamamoto (1995) to contribute to the debate on exchange rates and stock prices in Sweden. It examines a possible causal relation between these variables in a vector autoregression (VAR) model. The results show that Granger causality is unidirectional running from stock prices to effective exchange rates. The results also reveal that an increase in Swedish stock prices is associated with an appreciation of the Swedish krona. Special attention is given to the estimation methodology and the lag choosing process.     

Causality Between Exports and Economic Growth: The Empirical Evidence from Shanghai

The export-led growth hypothesis is tested using monthly time series data for Shanghai (one of the major exporting provinces in China) using the Granger no-causality procedure developed by Toda and Yamamoto (1995) in a vector autoregresion (VAR) model. This paper builds on the existing literature in three distinct ways. This is the first study of the export-led growth hypothesis which employs a regional dataset (Shanghai). Second, the paper follows Riezman et al . (1996) in controlling for the growth of imports to avoid a spurious causality result; and finally, the use of the methodology by Toda and Yamamoto is expected to improve the standard F -statistics in the causality test process. The research finds one-way Granger causality running from GDP to exports     

Economic growth and financial development in Asian countries: A bootstrap panel Granger causality analysis

This study using Kónya (2006) [Kónya, L. (2006). Exports and growth: Granger causality analysis on OECD countries with a panel data approach. Economic Modelling 23, 978–992.] method of bootstrap panel Granger causality analysis, which considers the issues of cross-sectional dependency and slope heterogeneity among countries investigated simultaneously, analyzes the causality between financial development and economic growth among ten Asian countries surveyed during period 1980 to 2007. We find that the direction of causality between financial development and economic growth is sensitive to the financial development variables used in the ten Asian countries examined in this work. Moreover, our findings support the supply-leading hypothesis, as many financial development variables lead economic growth in some of the ten Asian countries surveyed, especially in China.     

The savings-growth nexus for the Malaysian economy: a view through rolling sub-samples

The purpose of this study is to re-investigate the savings-growth nexus for the Malaysian economy using bounds testing approach to cointegration and Toda and Yamamoto (1995) and Dolado and Lütkepohl (1996) – TYDL Granger causality test. This study covered the sample period from 1971:Q1 to 2008:Q4. The cointegration results suggest that the variables are moving together in the long run and the TYDL Granger causality results indicate that the relationship between savings and economic growth is bilateral. In addition, the rolling sub-samples TYDL Granger causality test exhibited a relatively stable causal relationship running from savings to economic growth in Malaysia particularly before the onset of Asian Financial Crisis in 1997/1998.     

A multivariate time series analysis of energy consumption,real output and pollutant emissions in a developing economy: New evidence from Nepal

Mountain economies will have to play a central role in attaining the global pursuit of green economic growth as crucial bearers of ecosystems goods and services. However, these economies are not adequately represented in the development policy debates in spite of their fundamental importance towards global sustainable development. This study examines the inter relationships between energy consumption, output and carbon emissions in a developing mountainous economy using an augmented Vector Autoregression model. Time-series data over the period 1975–2013 is studied applying a multivariate framework using population and gross fixed capital formation as additional variables for Nepal. Testing for Granger causality between integrated variables based on asymptotic theory reveals a long-run unidirectional Granger causality running from GDP to energy consumption, and a unidirectional Granger causality running from carbon emissions to GDP. We suggest that the government of Nepal can address energy poverty by accelerating the adoption energy conservation policies such as rationing energy consumption and energy efficiency improvements to narrow the energy supply-demand gap. The opportunity to promote the uptake of decentralised off-grid renewable technologies in remote areas and the large scale development of hydropower at the national level also needs to be prioritized. Our results remain robust across different estimators and contributes to an emerging literature on the nexus relationships between energy consumption, income and carbon emissions in mountainous developing economies.     

Temporal causality and the dynamics of democracy,emigration and real income in Fiji

This study is the first to explore temporal causality between democracy, emigration and real income in Fiji within a multivariate cointegration model. We find three long run relationships between democracy, emigration and real income. In the long run there is evidence that migration and democracy Granger cause real GDP in Fiji; real GDP and democracy Granger cause migration from Fiji and that real GDP and migration Granger cause democracy in Fiji. In the short run we find unidirectional Granger causality running from migration to real GDP and from democracy to real GDP, but neutrality between democracy and migration in the short run. We also extend the analysis to examine the degree of exogeneity of the variables beyond the sample period through considering the decomposition of variance and impulse response functions.     

Crime rates,male youth unemployment and real income in Australia: evidence from Granger causality tests

This article applies Granger causality tests to examine the relationship between seven different categories of property crime and violent crime against the person, male youth unemployment and real male average weekly earnings in Australia from 1964 to 2001 within a cointegration and vector error correction framework. It is found that fraud, homicide and motor vehicle theft are cointegrated with male youth unemployment and real male average weekly earnings. However, there is no evidence of a long-run relationship between either break and enter, robbery, serious assault or stealing with male youth unemployment and real male average weekly earnings.     

Economic growth,exports and foreign direct investment in Least Developed Countries: A panel Granger causality analysis

This paper investigates potential Granger causality among the real GDP, real exports and inward FDI in Least Developed Countries for the period between 1970 and 2009. A new panel-data approach developed in Kónya (2006) [Kónya (2006), Exports and growth: Granger causality analysis on OECD countries with a panel data approach, Economic Modelling, 23, 978–992] which is based on SUR systems and Wald tests with country specific bootstrap critical values has been employed. The results indicate direct, one-period-ahead, unidirectional causality from exports to GDP in Haiti, Rwanda and Sierra Leone, and from GDP to exports in Angola, Chad and Zambia. Considering the FDI–Growth nexus, there is evidence of FDI Granger-causing GDP in Benin and Togo, and GDP Granger-causing FDI in Burkina Faso, Gambia, Madagascar and Malawi. While studying EXP–FDI relations, this paper finds that the causality is from FDI to real exports in Benin, Chad, Haiti, Mauritania, Niger, Togo and Yemen, and from real exports to FDI in Haiti, Madagascar, Mauritania, Malawi, Rwanda, Senegal and Zambia.     

Coal consumption: An alternate energy resource to fuel economic growth in Pakistan

This study is an attempt to revisit the causal relationship between coal consumption and economic growth in case of Pakistan. The present study covers the period of 1974–2010. The direction of causality between the variables is investigated by applying the VECM Granger causality approach. Our findings have exposed that there exists bidirectional Granger causality between economic growth and coal consumption. The Cumulative Sum (CUSUM) and Cumulative Sum of Square (CUSUMSQ) diagrams have not found any structural instability over the period of 1974–2010.     

Does productivity growth lower inflation in Korea?

We investigate Granger causality between productivity growth and inflation in Korea using quarterly data for the period 1985Q1–2002Q4. Our results indicate unidirectional Granger causality from productivity growth to inflation. In light of such causality, we estimate the effect of productivity and other variables on productivity. According to our regression results, a 1% increase in labour and Total Factor Productivity (TFP) reduces Consumer Price Index (CPI) inflation by 0.07–0.08% and 0.37–0.44%, respectively. Our results also suggest that the productivity-inflation nexus became stronger in Korea since the Asian financial crisis, and that this was largely due to structural reform and technological progress.     

Export-led growth: the case of the Slovenian and Estonian economies

The export-led growth hypothesis is investigated in the case of the two small, open and export-oriented Slovenian and Estonian economies. The Johansen cointegration test and Granger causality test were applied to investigate the relationship between the time series variables for export, import and gross domestic product (GDP). The results reveal evidence to support the export-led growth hypothesis in both economies. The Granger causality relationship is found between export growth and economic (GDP) growth for both countries. Slovenia and Estonia can enhance economic growth by providing a better enabling environment for exporters and by market expansion.     

Natural gas prices and stock prices: Evidence from EU-15 countries

This study investigates the long-run relationship between natural gas prices and stock prices by using the Johansen and Juselius cointegration test and error–correction based Granger causality models for the EU-15 countries. We employ quarterly data covering the period from 1990:1 to 2008:1. Empirical findings suggest that there is a unique long-term equilibrium relationship between natural gas prices, industrial production and stock prices in Austria, Denmark, Finland, Germany and Luxembourg. However, no relationship is found between these variables in the other ten EU-15 countries. Although we detect a significant long-run relationship between stock prices and natural gas prices, Granger causality test results imply an indirect Granger causal relationship between these two variables. In addition, we investigate the Granger causal relationship between stock returns, industrial production growth and natural gas price increase for Austria, Denmark, Finland, Germany and Luxembourg. As a result, increase in natural gas prices seem to impact industrial production growth at the first place. In turn, industrial production growth appears to affect stock returns.