IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/69517.html
   My bibliography  Save this paper

An economic growth model: Evaluating the interaction of market consumption with GDP growth rate in Afghanistan

Author

Listed:
  • Azimi, Mohammad Naim

Abstract

In this paper, we argue that the market consumption is one of the major and significant elements of Gross Domestic Product driver in Afghanistan for which the competeting null hypothesis that consumption drives the GDP growth is tested. The statistical analysis based on Semi-long regression economic growth model shows a significant corresponding probability value of 0.000 which shows that consumption drives GDP growth while the coefficient exhibits 0.1534 or 15.34% growth of GDP driven by consumption throughout the period 2001 to 2014. Further statistical analysis obtained from the Breusch-Godfrey and Breusch – Pegan-Godfrey LM tests for investigating the existence of any serial correlation within the series support us to reject the null hypothesis that there is no serial correlation within the series. On the other hand, the Jarque-Bera test of normality shows a p-value of 0.3099 which is significant and further documents that the residuals are random and normally distributed within the series.

Suggested Citation

  • Azimi, Mohammad Naim, 2016. "An economic growth model: Evaluating the interaction of market consumption with GDP growth rate in Afghanistan," MPRA Paper 69517, University Library of Munich, Germany, revised 11 Jan 2016.
    • Handle: RePEc:pra:mprapa:69517
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/69517/1/MPRA_paper_69517.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    2. Huang, Bwo-Nung & Hwang, M.J. & Yang, C.W., 2008. "Causal relationship between energy consumption and GDP growth revisited: A dynamic panel data approach," Ecological Economics, Elsevier, vol. 67(1), pages 41-54, August.
    3. Mozumder, Pallab & Marathe, Achla, 2007. "Causality relationship between electricity consumption and GDP in Bangladesh," Energy Policy, Elsevier, vol. 35(1), pages 395-402, January.
    4. Claudia Nassif & Omar Joya & Guillemette Sidonie Jaffrin, 2013. "Afghanistan Economic Update, April 2013," World Bank Publications - Reports 16510, The World Bank Group.
    5. Eriṣ, Mehmet N. & Ulaṣan, Bülent, 2013. "Trade openness and economic growth: Bayesian model averaging estimate of cross-country growth regressions," Economic Modelling, Elsevier, vol. 33(C), pages 867-883.
    6. Omar Joya & Faruk Khan, 2014. "Afghanistan Economic Update, April 2014," World Bank Publications - Reports 18633, The World Bank Group.
    7. David I. Stern and Astrid Kander, 2012. "The Role of Energy in the Industrial Revolution and Modern Economic Growth," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    8. Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-1294, September.
    9. Krausmann, Fridolin & Gingrich, Simone & Eisenmenger, Nina & Erb, Karl-Heinz & Haberl, Helmut & Fischer-Kowalski, Marina, 2009. "Growth in global materials use, GDP and population during the 20th century," Ecological Economics, Elsevier, vol. 68(10), pages 2696-2705, August.
    10. Jarque, Carlos M. & Bera, Anil K., 1980. "Efficient tests for normality, homoscedasticity and serial independence of regression residuals," Economics Letters, Elsevier, vol. 6(3), pages 255-259.
    11. Qaiser Munir & Kasim Mansur, 2009. "Non-Linearity between Inflation Rate and GDP Growth in Malaysia," Economics Bulletin, AccessEcon, vol. 29(3), pages 1555-1569.
    12. Zaman, Asad, 1995. "On the inconsistency of the Breusch-Pagan test," MPRA Paper 9904, University Library of Munich, Germany.
    13. Ciarreta, A. & Zarraga, A., 2010. "Economic growth-electricity consumption causality in 12 European countries: A dynamic panel data approach," Energy Policy, Elsevier, vol. 38(7), pages 3790-3796, July.
    14. Apergis, Nicholas & Payne, James E., 2010. "The causal dynamics between coal consumption and growth: Evidence from emerging market economies," Applied Energy, Elsevier, vol. 87(6), pages 1972-1977, June.
    15. Herwartz, Helmut, 2006. "Testing for random effects in panel data under cross sectional error correlation--A bootstrap approach to the Breusch Pagan test," Computational Statistics & Data Analysis, Elsevier, vol. 50(12), pages 3567-3591, August.
    16. Koenker, Roger, 1981. "A note on studentizing a test for heteroscedasticity," Journal of Econometrics, Elsevier, vol. 17(1), pages 107-112, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Al-mulali, Usama & Fereidouni, Hassan Gholipour & Lee, Janice Ym & Sab, Che Normee Binti Che, 2013. "Examining the bi-directional long run relationship between renewable energy consumption and GDP growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 22(C), pages 209-222.
    2. Glenn Otto & Graham M. Voss, 1994. "Public Capital and Private Sector Productivity," The Economic Record, The Economic Society of Australia, vol. 70(209), pages 121-132, June.
    3. Bithas, K. & Kalimeris, P., 2013. "Re-estimating the decoupling effect: Is there an actual transition towards a less energy-intensive economy?," Energy, Elsevier, vol. 51(C), pages 78-84.
    4. Francisco Cribari-Neto, 1996. "On the Corrections to Information Matrix Tests," Econometrics 9601001, University Library of Munich, Germany.
    5. Clarke, George R. G., 1995. "More evidence on income distribution and growth," Journal of Development Economics, Elsevier, vol. 47(2), pages 403-427, August.
    6. Saboori, Behnaz & Sulaiman, Jamalludin, 2013. "Environmental degradation, economic growth and energy consumption: Evidence of the environmental Kuznets curve in Malaysia," Energy Policy, Elsevier, vol. 60(C), pages 892-905.
    7. Walheer, Barnabé, 2018. "Labour productivity growth and energy in Europe: A production-frontier approach," Energy, Elsevier, vol. 152(C), pages 129-143.
    8. MacKinnon, James G, 1992. "Model Specification Tests and Artificial Regressions," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 102-146, March.
    9. Francisco Cribari-Neto, 1997. "On the corrections to information matrix tests," Econometric Reviews, Taylor & Francis Journals, vol. 16(1), pages 39-53.
    10. Kyei, Collins Baffour & Cantah, William Godfred & Junior Owusu, Peterson, 2023. "Effect of commodity prices on financial soundness; insight from adaptive market hypothesis in the Ghanaian setting," Resources Policy, Elsevier, vol. 86(PA).
    11. Ather Akbari & Tomson Ogwang, 1997. "The Canadian earnings functions under test," Applied Economics Letters, Taylor & Francis Journals, vol. 4(2), pages 133-139.
    12. Reichert, Michael Justus & Fantapié-Altobelli, Claudia, 2016. "Country-of-origin effects in industrial goods markets: Do country-of-origin image effects differ for different buying center members?," jbm - Journal of Business Market Management, Free University Berlin, Marketing Department, vol. 9(2), pages 623-649.
    13. Bastola, Umesh & Sapkota, Pratikshya, 2015. "Relationships among energy consumption, pollution emission, and economic growth in Nepal," Energy, Elsevier, vol. 80(C), pages 254-262.
    14. Bartolini, David & Ninka, Eniel & Santolini, Raffaella, 2017. "Tax Decentralisation, Labour productivity and Employment," MPRA Paper 81070, University Library of Munich, Germany.
    15. Charles G. Renfro, 2009. "The Practice of Econometric Theory," Advanced Studies in Theoretical and Applied Econometrics, Springer, number 978-3-540-75571-5.
    16. Joachim Wagner, 1990. "Le test de fonctions de gains : résultats pour cinq pays," Économie et Prévision, Programme National Persée, vol. 92(1), pages 61-66.
    17. Muhammad Usman & Kiran Rasheed & Faiq Mahmood & Ahsan Riaz & Mohsin Bashir, 2023. "Impact of Financial Development and Economic Growth on Energy Consumption in Developing Countries of Asia," International Journal of Energy Economics and Policy, Econjournals, vol. 13(3), pages 512-523, May.
    18. Haluk Erlat, 1991. "An Ex Post Statistical Assessment of the Central Bank Quarterly Econometric Model of Turkey," Discussion Papers 9108, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    19. Iris Claus, 2000. "Is the output gap a useful indicator of inflation?," Reserve Bank of New Zealand Discussion Paper Series DP2000/05, Reserve Bank of New Zealand.
    20. Villanthenkodath, Muhammed Ashiq & Mahalik, Mantu Kumar, 2021. "Does economic growth respond to electricity consumption asymmetrically in Bangladesh? The implication for environmental sustainability," Energy, Elsevier, vol. 233(C).

    More about this item

    Keywords

    Market Consumption; GDP; Homoskedasticity; Heteroskedasticity; Economic Growth;
    All these keywords.

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • G1 - Financial Economics - - General Financial Markets
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:69517. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.