Furthermore, the effects of government expenditure and trade on inequality are found to be insignificant for developing economies. The determinants of income inequality varying from developed to developing countries, have intrigued economists over the decades, initiating them to conduct several studies on the topic. This paper examines the determinants of income inequality over a 15 year period between 1996 to 2010 in two specific regions; developed economies from Europe and developing economies with majority of them consisting of South American countries. This paper will cross-compare findings to distinguish correlations and differences between the two sets of countries. As a result, this study will incorporate the Gini coefficient as the dependent variable.
Gounder (1999, 2002) has used the ARDL methodology to test empirically various growth hypotheses for Fiji using similar sample sizes to that in this study. Pattichis (1999), Mah (2000), Tang and Nair (2002) and Tang (2001, 2003) applied the ARDL bounds test approach to estimate the import demand function using small sample cases. Tang (2003) applied the ARDL Bounds test approach to estimate the import demand function for Japan with only 18 annual observations. We have 27 annual observations. Therefore, application of the ARDL Bounds test approach is very appropriate.
For non-stationary series but with a cointegrating relationship, the Granger-causality test has been applied after the construction of the vector error correction model (VECM). The empirical findings of the study show that there is a positive relation between all indicators measuring the financial development and economic growth in the long term. While in the short term, this relation is quite vague since different indicators provide different results. The data used in this paper belong to the period 1996-2007.
How changes in these figures are related to the current economy as advertising is promoted as an engine that drives the economy rather than a supplement? 2. A composite index 2.1 Laspeyres Price Index The most commonly used weighted price index is the Laspeyres Price Index named after its inventor. It is a weighted aggregate price index that uses the quantities in the base period/ year as weights (Harper, 1991,p215). In essence, Laspeyres price index for the year measured shows the extent of price changes since base year on the assumption that the expenditure pattern was the same in the year measured as in base year.
The proposed analysis: taxation and stability policy with a sample of 60 countries around the world during the period 2002 to 2008, helping to make distinctions between the political instability experienced but maintained high taxation, and those states with political stability but with a low taxation. The few variables that are used in the model, and its reduction to a two-way relationship is one of its merits, when compared with other models used in similar studies. The model also contains a simple explanation for a complex problem: measuring the taxing power and its relations with political stability, and vice versa, to measure political stability based on taxation. The model results are not linear, but rather its variables: (Tax, PS, GE, FC and GDP) are involved in the system with a relative weight. In any case shows that the bijective relationship between taxation and political stability depends on the institutional framework and the type of government.
From this we deduce that this elasticity is relevant to the design of the lottery (Farrel 1). The way that the demand elasticity is derived is by comparing the rollover weeks with the non-rollover weeks. By doing this, the normal demand is recorded during the non-rollover weeks to see what level the demand is usually at. Then from there they can see how the demand increases as the lott... ... middle of paper ... ...ing how some studies and economic research has been taking place and where. I found some of the studies to be trivial.
(www.worldbank.org/html/dec/Publications/Bulletins/PRBvol3no5.html). This can also be supported by Ismihan and Ozkan (2003, p2) who go on to say that empirical evidence for the negative correlation in developing countries has been less clear-cut. Another important factor is whether price stability is achieved through sacrifice of other macroeconomic objectives such as economic growth and full employment. There has been empirical research carried out to find whether there is any link or trade-offs between inflation and other important macroeconomic variables. An article by Fischer points out that there is a short-run trade off between unemployment and inflation and suggests that shouldn’t the central bank be given the task of maintaining full employment together with that of maintaining low inflation.
International Financial Management 943 Methods of Forecasting Exchange Rates There are various methods of forecasting the exchange rates between two or more countries’ currencies (Alvarez-Diaz, 2008). Prediction of exchange rates between countries helps to minimize risks while maximizing the returns. Some of these methods includes purchasing power parity (PPP), relative economic strength approach, econometric models, and time series models, among others. The forward method uses purchasing power parity (PPP) method where the only consideration is the inflation rates between the two countries (Taylor, 2003). This approach depends on the theoretical law that identical goods will cost the same in different countries excluding the after taking into consideration the exchange rates and excluding the transaction and shipping cost.
Gross Domestic Product GDP Top 10 (2004) (currency exchange rate) Country GDP ($ mill) 1 United States 10,435,284 2 China 5,409,852 3 Japan 4,326,444 4 Germany 2,400,655 5 United Kingdom 1,794,858 6 France 1,747,973 7 Italy 1,465,895 8 Canada 958,390 9 Spain 836,100 10 Mexico 626,888 Gross Domestic Product (GDP) is the total value of final goods and services produced within a country's borders in a year. GDP counts income according to where it is earned rather than who owns the factors of production. In the above example, all of the income from the car factory would be counted as US GDP rather than German GDP. To convert from GNP to GDP you must subtract factor income receipts from foreigners that correspond to goods and services produced abroad using factor inputs supplied by domestic sources. To convert from GDP to GNP you must add factor input payments to foreigners that correspond to goods and services produced in the domestic country using the factor inputs supplied by foreigners.
Accordingly, the BLS revised its measure to reduce the bias, such that the Government Accounting Office estimated that the bias became closer to 0.8 percentage points. The CPI measures the current-dollar price of a fixed, “market basket” of goods and services, relative to the price of that same basket in a base year. The market basket is comprised of a weighted average of expenditures, with the weights changing infrequently. This construction leads to the over-estimation of inflation identified by the Boskin Commission. This bias arises for several reasons.