Stationary properties of the real interest rate and the per-capita consumption growth rate: empirical evidence for theoretical arguments

2009 ◽  
Vol 41 (13) ◽  
pp. 1643-1651 ◽  
Author(s):  
Claude Lopez ◽  
Javier Reyes
Keyword(s):  
Growth Rate ◽  
Interest Rate ◽  
Empirical Evidence ◽  
Real Interest Rate ◽  
Capita Consumption ◽  
Consumption Growth ◽  
The Real ◽  
Per Capita ◽  
Per Capita Consumption

scholarly journals Government borrowing as a Ponzi scheme: the case of Bangladesh

2021 ◽  
Vol 10 (1) ◽  
pp. 81-86
Author(s):  
Syed Yusuf Saadat
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Interest Rate ◽  
Real Interest Rate ◽  
Government Debt ◽  
Economic Growth Rate ◽  
The Real ◽  
Ponzi Scheme ◽  
The Government

This study investigates whether government borrowing can be likened to a Ponzi scheme which will allow the government to roll-over its debt perpetually. The results show that, on the basis of the condition of maintaining real economic growth rate above and beyond the real interest rate on government debt, it will not be possible to sustain a perpetual Ponzi scheme of all four types of National Savings Certificates in Bangladesh. The government’s debt may be rolled over perpetually for two types of National Savings Certificates, following the condition outlined in Ball, et al. (1998), or for three types of National Savings Certificates following the condition outlined in Mehrotra (2017). 

scholarly journals INTERNATIONAL TRADE AND INDUSTRIALIZATION WITH NEGATIVE POPULATION GROWTH

2014 ◽  
Vol 19 (8) ◽  
pp. 1647-1658 ◽  
Author(s):  
Hiroaki Sasaki
Keyword(s):  
Growth Rate ◽  
Population Growth ◽  
Population Growth Rate ◽  
Home Country ◽  
Capita Consumption ◽  
World Population ◽  
Long Run ◽  
Per Capita ◽  
Per Capita Consumption ◽  
Negative Population

This paper builds a small-open-economy nonscale-growth model with negative population growth and investigates the relationship between trade patterns and per capita consumption growth. Under free trade, if the population growth rate is negative and its absolute value is small, the home country becomes an agricultural country. Then the long-run growth rate of per capita consumption is positive and depends on the world population growth rate. On the other hand, if the population growth rate is negative and its absolute value is large, the home country becomes a manufacturing country. Then the long-run growth rate of per capita consumption is positive and depends on both the home country and the world population growth rates. Moreover, the home country is better off under free trade than under autarky in terms of per capita consumption growth irrespective of whether the population growth is positive or negative.

scholarly journals Determinants of Thai Baht Exchange Rate and Asian Currencies Exchange Rate

2020 ◽  
Vol 11 (5) ◽  
pp. 1
Author(s):  
Paitoon Kraipornsak
Keyword(s):  
Exchange Rate ◽  
Random Walk ◽  
Interest Rate ◽  
Real Interest Rate ◽  
External Debt ◽  
The Real ◽  
Foreign Reserve ◽  
Income Per Capita ◽  
Per Capita ◽  
The Exchange Rate

The study hypothesises that the exchange rate is a random walk series. Besides, the study incorporates main macroeconomic factors as a structural exchange rate determination. The Vector Error Correction Model (VECM) is applied in the model estimation for Thai baht. Moreover, the panel data model of the Asian exchange rate is estimated and analysed. The exchange rate of Thai baht is found to be a random walk process. The long-run equilibrium of the estimated cointegrating relation indicates all coefficients of the determining factors are statistically significant. An increase in the real interest rate and the foreign reserve has significant appreciation effects on the Thai baht. An increase in the income per capita has a significant depreciation effect on the Thai baht. External debt causes a depreciation in the Thai baht. The most substantial impact on the value of Thai baht is the income per capita. It follows by the foreign reserve, the real interest rate, and the external debt, respectively. During 2017 and 2018, the estimated exchange rate is appreciated by 4.21 per cent that is close to the actual appreciated value. The estimated Asian model is found consistent with the model of the Thai baht. The highest impact on the local Asian currencies is the income per capita. It follows by the foreign reserve and the real interest rate, respectively, with both quite close by their sizes. However, the foreign reserve has a more appreciated influence than that of the real interest rate for Thai baht.

scholarly journals On the Optimal Inflation Rate

2016 ◽  
Vol 106 (5) ◽  
pp. 484-489 ◽  
Author(s):  
Markus K. Brunnermeier ◽  
Yuliy Sannikov
Keyword(s):  
Growth Rate ◽  
Interest Rate ◽  
Portfolio Choice ◽  
Capital Investment ◽  
Real Interest Rate ◽  
Physical Capital ◽  
Individual Agent ◽  
The Real ◽  
Portfolio Decisions ◽  
Pecuniary Externality

In our incomplete markets economy households choose portfolios consisting of risky (uninsurable) capital and money. Money is a bubble, it has positive value even though it yields no payoff. The market outcome is constrained Pareto inefficient due to a pecuniary externality. Each individual agent takes the real interest rate as given, while in the aggregate it is driven by the economic growth rate, which in turn depends on individual portfolio decisions. Higher inflation due to higher money growth lowers the real interest rate on money and tilts the portfolio choice towards physical capital investment. Modest inflation boosts growth rate and welfare.

scholarly journals Bayesian multivariate Beveridge–Nelson decomposition of I(1) and I(2) series with cointegration

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Yasutomo Murasawa
Keyword(s):  
Growth Rate ◽  
Interest Rate ◽  
Real Interest Rate ◽  
Bayesian Method ◽  
Output Growth ◽  
The Real

Abstract The dynamic IS equation implies that if the real interest rate is I(1), then so is the output growth rate with possible cointegration, and log output is I(2). This paper extends the Beveridge–Nelson decomposition to such a case, and develops a Bayesian method to obtain error bands. The method is valid whether log output is I(1) or I(2). The paper applies the method to US data to estimate the natural rates (or their permanent components) and gaps of output, inflation, interest, and unemployment jointly, and finds that allowing for cointegration gives much bigger estimates of the gaps for all variables.

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