African J. of Economic and Sustainable Development (4 papers in press)
Choice of Environmental Policy Instruments and Welfare in Middle-income countries: the case of Cote dIvoire
by Boka Assa, Zie Ballo, Mbaye Diene
Abstract: The purpose of this paper is to determine among pollution taxes, rules and a combination of taxes-rules instruments, one that allows increasing welfare in middle-income countries (MICs) that face economic and environmental shocks. To do this, we used a micro-founded dynamic stochastic general equilibrium (DSGE) model whose parameters are estimated on the Ivoirian economy by the Bayesian method. The results of welfare comparison under three regimes show on the one hand that when public abatement spending is effective, welfare under pollution taxes are higher than pure rules if shocks are strong. But when rules are combined with output taxes for public clearance spending (mixed instrument), welfare under mixed instrument become better than pollution taxes regardless of the type of shock. On the other hand, when the government intervention is inefficient, welfare under pollution taxes are almost equivalent to pure rules but remain lower than the mixed instrument. Our findings suggest that rules combined with output taxes for public clearance spending are appropriate to deal with the economic and environmental shocks in MICs.
Keywords: Middle-income countries; environmental policy instruments; general equilibrium; shock.
Positive and Negative Impacts of Natural Gas Consumption on Economic Growth in Nigeria: A Nonlinear ARDL Approach
by Mukhtar Danladi Galadima, Abubakar Wambai Aminu
Abstract: The paper has examined positive and negative effects of natural gas on economic growth in Nigeria using Nonlinear Autoregressive Distributed Lag (NARDL) model. The findings revealed that the negative and positive impacts of natural gas consumption on economic growth are asymmetric in the long run whereas in the short run such evidence has not been found. However, in the long run, the positive impact is 0.15% per 1% increase while the negative impact is insignificant. The implication of the results is that an increase in natural gas consumption can stimulate growth in the long run and, energy efficiency / energy saving policies is not a limiting factor to growth, thus, it does not engender a fall in the rate of economic growth. Therefore, the paper recommends that authorities of the Nigerias economy boost the domestic demand for natural gas, and chart out energy efficiency strategies such as using a light-emitting diode (LED) light bulb or a compact florescent light (CFL) bulb that requires less energy than an incandescent light bulb, and water booster heaters. This way, sustainable economic growth, curbing the issue of global warming and, minimizing costs of energy consumption can be achieved.
Keywords: Non-linear ARDL; Natural Gas Consumption; Economic Growth.
Effect of Credit Supply Constraint on Labor Productivity in sub-Saharan Africa
by Kwame Acheampong
Abstract: This paper investigates the effect of credit supply constraint of risk on labor productivity in 33 sub-Saharan Africa (SSA) countries spanning 1990-2013. It estimates the long run effect of credit supply constraints on labor productivity using the Pooled Mean Group (PMG) estimator. The results revealed that a reduction in both actual and expected risk premiums increased labor productivity in SSA. This findings suggest that in order to relax the credit supply constraints with the intent to improving labor productivity, domestic interest rate should account for changes in foreign interest rate to enhance the needed capital inflows.
Keywords: productivity; credit; risk; interest-rate.
JEL: F65. F66. G11.
MONEY SUPPLY, INFLATION AND ECONOMIC GROWTH IN LIBYA
by Ahmed Krouso, Dilek Temiz Dinc, Aytac Gokmen, Mehmet Yazici
Abstract: The aim of this study is to examine the relationship between money supply, inflation and economic growth in Libya. Vector Auto-regression Model, Johansen co-integration test and Granger causality were used in the analysis for the sample period of 1960-2016. The results indicate that all the variables are co-integrated in long-term. Furthermore, the increase in economic growth by 1% decreases inflation by 1.55%. While the growth in money supply by 1 percent will increase the price level by 1.15 %. According to the results of the causality test, there is no causality direction in short-run among the variables except unidirectional causality among economic growth and money supply running from RGDP to RM2 at the to 5% significance level. In addition, the response of inflation on the economic growth is negative all throughout the ten periods. Also, the same applies to money supply and economic growth. Besides, economic growth has an early and positive impact on money supply.
Keywords: Money supply; Inflation; Economic Growth; Co-integration; Libya.