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No. 330 |
January 2003 |
Vol LXXXIII |
ISSN 0019-5170 |
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Contents
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The
Impact of Economic Reform on the Behaviour of Stock Prices: Empirical Evidence
From The Nigerian Stock Market
HASSAN E. OAIKHENAN
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This paper incorporates firms' tax evasion with the model of
Ricketts [1984] and investigates the effect of tax evasion on domestic output
and tax collects through two channels: individual consumption expansion due to
higher disposable income and firms investment expenditure increment as a result
of lower input costs. The results indicate that a rise in tax evasion is not
necessarily associated with a higher level of domestic output, and may actually
lead to higher total tax collection. |
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Climate Change: An Indian Perspective
KAKALI MUKHOPADHYAY
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In this paper we examine both long-term and short-term
dynamic relationships among money supply and its components for Bangladesh
economy within an Engle-Granger error-correction framework. Using 24 years of
annual data on money and its components, our results suggest that MI and M2
money supply have very predictable long-run relation- ships with its
components. Moreover, MI money supply has short-run relationship with its
components but no short-term relationships exist among M2 and its components
indicating the absence of a developed money market operation in Bangladesh.
Finally, the choice between monetary targeting and inflation targeting is also
discussed. |
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Theoretical and Empirical Issues on Manufacturing Capacity
Utilisation: The Case of Manufacturing Industries in Ghana
K. ACHEAMPONG AND J. V. MENSAH
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This study analyses whether or not the fast growth in the
size of the government sector in Botswana was a stimulus to economic growth; in
particular, whether it continued to be a stimulus, or it later became an
impediment to Botswana's economic growth. The study employs two methods to
gauge the impact of government size on economic growth. First, it utilizes the
conventional approach, which is a variant of the famous Slow growth model.
Secondly, the study employs a novel approach, which allows for intersectoral
productivity differential between the government and non-government sectors,
The new approach also explicitly models the externality effect of government
size, Furthermore, in both methods of a structural break is included by means
of an interactive dummy variable to determine whether or not the role of the
government sector remains the same or changes over time. These methods are
estimated with data for Botswana for the period 1976-98.
The results show that up to 1995, the government sector, as measured by
government development expenditure, has a positive externality on the
non-government sector. However, after 1995, the impact of the government sector
is negative. These results support the view held by some economists that the
government sector is a necessary catalyst in fostering economic growth in the
initial stages of the growth and development of a country. Eventually,
'however, the government sector becomes an impediment to economic growth
because big government starts to crowd out the private sector. |
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A Taxation Model on
Exhaustible Resources
CHUNG-CHIANG CHEN
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The study investigated the empirical validity of the
monetary model of exchange rate determination for Indian rupee, Pound Sterling
and Yen in terms of US dollar. The necessary monthly information were collected
from the International Financial Statistics for the year 1975 : 10 to 1998: 05.
The model doubts the role of monetary variable viz., money supply, interest
rate and Index of Industrial Production on the nominal exchange rate of the
selected currencies in the short run. The model proves that the exchange rates
are not determined by purely monetary factors. Besides economic liberalization
did not alter the results of variability of exchange rate determination under
monetary model framework of the selected countries' currencies. Hence the study
provides scope for developing a comprehensive structural model by incorporating
other fundamental variables like trade balance, reserve position, government's
fiscal deficit as percentage to GDP, public debt position etc., to judge the
value and direction of exchange rate movements. |
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The Relation Between
Foreign Direct Investment and Growth: Causality and Mechanisms
MOUSUMI Dun ARA Y, AMIT A V A KRISHNA Dun AND KAJAL
MUKHOPADHYAY
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We use an option-based valuation to examine mirror
transactions of loan portfolio swaps between a parent bank and its structured
derivative product company (DPC). The transactions are governed by capital
regulation and deposit insurance. We model the risk premium compensation on the
parent bank's loan portfolio swaps that reflect the magnitude of potential
default risk of its structured DPC. We show that under strategic complements,
the parent's optimal non-swap-performing and swap-performing loan rates are a
decreasing function of the defaulting of the DPC's collateral and
capital-to-deposits ratio, and an increasing function of the DPC's customer
bank's loan rate and deposit insurance premium. |
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Infonnal Sector, Micro Credit Delivery and Entrepreneurial
Development in Nigeria
SOILE, I. OLADIMEJI AND R. A. AJISAFE |
Government debts are directly relevant to government
revenues and expenditures. The relationship between government revenues and
expenditures has long been an interesting topic for research. Some studies
supported tax-spend, some supported spend-tax, some believed fiscal
synchronization, and others regard that is irrelevant. This study uses Taiwan
quarterly data from 1981 to 1999 to examine the debate on the temporal
relationship between government revenues and expenditures. The government
revenues grow at the growth of GDP, while the size of expenditures is result of
a requirement to conform to a budget constraint. The new government in Taiwan
faces the challenges in balancing the deficit and realizing campaign promises.
Government cut down the expenditure in order to reach a balanced budget. |
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Employment, Productivity
and Efficiency Trends in Indian Industries
S. P. SINGH
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Despite almost two decades of implementing the structural
adjustment program (SAP) of the World Bank and International Monetary Fund (IMF),
Ghana's economy is characterized by high inflation, heavy debt burden, mass
unemployment and vulnerability to external shocks. These problems compelled the
government to announce its intention to join the HIPC initiative in March 200
I. The decision has engendered a lot of 4ebates and speculations. The main
argument used by supporters of the decision is that the current economic
problems of the country provide little room for running the economy without
adopting the initiative. On the other hand, the opponents are skeptical about
the potency of the initiative in solving the country's economic woes. This
paper contributes to the debate by examining the prospects and concerns facing
Ghana for joining the HIPC initiative. It starts with a brief discussion of
antecedent factors, the eligibility characteristics, and the conditions
associated with joining the initiative. Further discussion concentrate on the
possible benefits and losses and prospects for the economy. It finally argues
that since the initiative only provides a short-term relief, the nation needs
real economic reforms that address its fundamental problems. |
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Expenditure Pattern and
Revenue Generation in Orissa State: Misplaced Priorities
PRATAP RANJAN JENA
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The banking industry in Nigeria is currently experiencing a
crisis of confidence that has resulted in some banks being liquidated while
some others have been taken over by the Central Bank of Nigeria (CBN). 'The
situation is of serious concern to the entire economic system, particularly
considering the significance of the banking industry to a nation's economic
growth. How can this trend be stopped? This is the focus of this paper.
To accomplish this task, we gathered data and information from some randomly
selected banks through the instrument of questionnaire coupled with personal
discussion with staff of the Research Department of Central Bank of Nigeria (CBN),
Nigeria Deposit Insurance Corporation (NDIC), and the Nigerian Stock Exchange (NSE).
Our analysis of these date gave us a clear insight of the factors responsible
for the current wave of distress in the banking sector. Based on our findings,
we have made suggestions that may help to restore confidence in the banning
sector.
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