scholarly journals PENURUNAN PAJAK EKSPOR DAN DAMPAKNYA TERHADAP EKSPOR MINYAK KELAPA SAWIT INDONESIA KE CINA (PENDEKATAN ERROR CORRECTION MODEL)

2018 ◽  
Vol 1 (3) ◽  
pp. 47-72
Author(s):  
Ernawati Munadi
Keyword(s):  
Error Correction ◽  
Palm Oil ◽  
Developing Economies ◽  
Error Correction Model ◽  
Oil Price ◽  
Export Demand ◽  
Correction Model ◽  
Export Duty ◽  
Long Run ◽  
The World

The palm oil Industry is an important sector in the Indonesian economiy as it is one of the country’s major export earners as well as food source for her population.Indonesia is the world second largest producer of palm oil after Malaysia, accounting for about 34% OF The  world production in the year 2006. Indonesia  is also the largest consumer of palm oil in the developing economies, in 2006. Indonesia consumed a total of 5.5 mn tonnes of palm oil. Of this amount 76.75% is comprised of  frying oil. About 55% of the production is exported in the form of crude palm oil mainly to Asian countries primarily to India and China and  Eruropean countries. Debate on Indonesia’s palm oil policy was stimulated by the sharp increase in cooking oil prices in 1994-1995 which resulted in the introduction of export tax rate on palm oil in order to maintain a certain level of domestic consumption.Using annual data for the period 1969-2006, an econometric  approach  mainly the error correction model. Was employed  in this study This paper examines the impacts of reduction in export duty onthe import demand of Indonesian palm oil to China. The findings indicate  that the  quantity of palm oil exported to China is significantly influenced by changes in the soybean oil price, world palm oil price, Industrial Production Index (IPI) exchange rate  and lagged of export demand of Indonesian palm oil to China by one year with the elasticity of 1,49, 1.47,0.24, 0.59, and 0.79, respectively. The coefficients for long run variables presented by the ECM are jointly not equal to zero.This result suggests that as a group, the long run variable (ECM) have influenced the changes in the export demand to China which is indicated by the significance of the coefficient. The simulation results suggest that the direct impact of reduction of export duty would increase the quantity exported to China. The Indonesia export to China from 95.36 thousand tones to 118,23 thousand tones.

scholarly journals A cointegration analysis of crude palm oil price in Thailand

2018 ◽  
Vol 52 ◽  
pp. 00035
Author(s):  
Patchaya Songsiengchai ◽  
Shaufique F. Sidique ◽  
Marcel Djama ◽  
W.N.W. Azman-Saini
Keyword(s):  
Soybean Oil ◽  
Crude Oil ◽  
Error Correction ◽  
Palm Oil ◽  
Commodity Prices ◽  
Cointegration Analysis ◽  
Oil Price ◽  
Crude Palm Oil ◽  
Long Run ◽  
The World

Reliazing the pass-through effects of global commodity prices on domestic prices, this study develops a vector error correction model (VECM) to test for the determinants and direction of causality between global prices and crude palm oil (CPO) price in Thailand. Malaysian crude palm oil, world soybean oil and world crude oil prices were investigated as factors affecting the Thai CPO price. Using the Johansen cointegration test, the result unveils a presence of long-run relationship among the determinants. This long-run relationship, proposes that CPO price flows in Thailand are positively influenced by the Malaysian CPO price and the error correction term suggests that approximately 35 percent of total disequilibrium in Thai CPO price was corrected in the following month. Moreover, the findings show Granger causality from each of the Malaysian CPO price and the world soybean oil price for the Thai CPO price. Information flow regarding the price movements of the Malaysian CPO and soybean oil affect the Thai CPO price and vice-versa. Whereas, the evidence for a causal relationship that runs from the world crude oil price to the Thai CPO price is found, but not in reverse.

Elasticities of Gold Demand—An Empirical Analysis Using Cointegration and Error Correction Model

2020 ◽  
pp. 097674792090311
Author(s):  
S. Maria Immanuvel ◽  
D. Lazar
Keyword(s):  
Error Correction ◽  
Income Elasticity ◽  
Error Correction Model ◽  
The Other ◽  
Correction Model ◽  
Long Run ◽  
The World ◽  
The Usa ◽  
Short Run ◽  
The Government

This article examines the long-run and the short-run elastic relationships between price, income and gold demand. Four major gold consuming countries in the world, such as India, the USA, Europe and Japan, are included in the analysis. The study period is from January 2000 to December 2017. Using the Cointegration and Error Correction model, we found a long-run relationship between gold demand, price and income of the consumers. Price elasticity is negative and income elasticity is positive in the long run. The speed of error correction is slightly higher for India. Indian gold market takes a shorter time to get back to its equilibrium than the other major gold consuming countries. India’s overall gold consumption is relatively lesser reactive to the fluctuations in the world gold price than the other countries. Consumers in India react expeditiously in the short run and their response to the price changes is stable in the long run. More than 70 per cent of India’s gold consumption is unaffected by the price fluctuations. This behaviour eventually increases the wealth in the country. Hence the study suggests that instead of curbing the demand, new financial products may be developed to monetise the gold lying idle in the households. Various gold monetisation schemes already launched by the government should reach especially the rural section, as most of them may not be aware of these schemes. This may tend to bring a considerable amount of gold into the system. JEL: G14, Q02, Q21

The Methodology of Cointegration

1992 ◽  
Vol 4 ◽  
pp. 237-247 ◽  
Author(s):  
Nathaniel Beck
Keyword(s):  
Error Correction ◽  
Political Attitudes ◽  
Error Correction Model ◽  
Correction Model ◽  
Long Run ◽  
Economic Circumstance ◽  
Economics Department ◽  
Technical Area

It is hardly surprising that I applaud the fine work of both Durr and Ostrom and Smith. I am on record in favor of the utility of the error correction model (e.g., Beck 1985) and it is impossible to obtain a visa to visit the economics department at UCSD without swearing an oath of loyalty to the methodology of cointegration. The two works here are notable for their methodological sophistication, their exposition of a relatively unknown and highly technical area, and, most important, their substantive contributions. Both articles show that political attitudes (approval and policy mood) adjust, in the long run, to changes in objective and subjective economic circumstance. Both articles are good examples of the synergy of methods and theory, since it is the methodology of cointegration that leads to this type of theorizing, and this type of theorizing can most easily be tested in the context of cointegration or error correction.

scholarly journals An application of the error correction model in analyzing the long run equilibrium between Ghana’s exports and imports

2015 ◽  
Vol 9 (3) ◽  
pp. 57-62
Author(s):  
Henry de-Graft Acquah ◽  
Joyce De-Graft Acquah
Keyword(s):  
Error Correction ◽  
Trade Deficit ◽  
Error Correction Model ◽  
Correction Coefficient ◽  
Equilibrium Relation ◽  
Macroeconomic Policies ◽  
Correction Model ◽  
Long Run ◽  
Step Procedure ◽  
Long Run Equilibrium

This study investigates the long-run relationship between Ghana’s exports and imports for the period of 1948 to 2012. Using the Engle Granger two-step procedure we find that Ghana’s exports and imports are cointegrated. However, the slope coefficients from the cointegration equations were not statistically equal to 1. Furthermore, application of the error correction model reveals that 1% increase in the imports will significantly result in 0.56% increase in exports, suggesting that the exports’ responsiveness to imports is low. The estimated error correction coefficient suggests that 32% of the deviation from the long run equilibrium relation is eliminated, leaving 68% to persist into the next period. These results suggest persistence in the trade deficit and an option of curbing the deficit is to re-order the relationship between imports and exports with a view to reducing imports demand. These results imply that though Ghana’s past macroeconomic policies have been effective in bringing its imports and exports into a long run equilibrium, it is yet to satisfy the sufficient condition for sustainability of foreign deficit.

scholarly journals The dynamic effect of exchange-rate volatility on Turkish exports: Parsimonious error-correction model approach

2015 ◽  
Vol 62 (4) ◽  
pp. 429-451 ◽  
Author(s):  
Erdal Demirhan ◽  
Banu Demirhan
Keyword(s):  
Exchange Rate ◽  
Error Correction ◽  
Exchange Rate Volatility ◽  
Dynamic Effect ◽  
Error Correction Model ◽  
Impulse Response Functions ◽  
Correction Model ◽  
Long Run ◽  
Export Volume ◽  
Short Run

This paper aims to investigate the effect of exchange-rate stability on real export volume in Turkey, using monthly data for the period February 2001 to January 2010. The Johansen multivariate cointegration method and the parsimonious error-correction model are applied to determine long-run and short-run relationships between real export volume and its determinants. In this study, the conditional variance of the GARCH (1, 1) model is taken as a proxy for exchange-rate stability, and generalized impulse-response functions and variance-decomposition analyses are applied to analyze the dynamic effects of variables on real export volume. The empirical findings suggest that exchangerate stability has a significant positive effect on real export volume, both in the short and the long run.

scholarly journals Price Transmission and Factors Influencing the Price of Onions in Tanzania

2020 ◽  
pp. 67-76
Author(s):  
Yohana James Mgale
Keyword(s):  
Error Correction ◽  
Error Correction Model ◽  
Price Transmission ◽  
Adjustment Cost ◽  
Producer Price ◽  
Correction Model ◽  
Factors Affecting ◽  
Long Run ◽  
Short Run ◽  
The Impact

This article analyzes the transmission of prices between marketing agents and the factors affecting onion prices at the consumer level. The Error Correction Model-Engle Granger (ECM-EG) was used to test the price transmission by including the impact of the rise and fall of producer, wholesale and retail prices in past periods. The Error Correction Model (ECM) was applied to the factors affecting onion prices. The test results showed that price transmission was asymmetrical in the short and long-run. With regard to factors, the results show that consumer price in the short-run was influenced by wholesale prices, producer prices and the price of fuel while in the long-run it was influenced by wholesale prices, producer price, price of fuel and consumer prices in the previous period (t-1). These results suggest the existence of a short-term adjustment cost and a long-term market power which distorts price transmission.

Exports, financial development and economic growth in Pakistan

2014 ◽  
Vol 13 (2) ◽  
pp. 155-170 ◽  
Author(s):  
Muhammad Shahbaz ◽  
Mohammad Mafizur Rahman
Keyword(s):  
Economic Growth ◽  
Error Correction ◽  
Financial Development ◽  
Error Correction Model ◽  
Causality Analysis ◽  
Bounds Testing ◽  
Causality Test ◽  
Correction Model ◽  
Content Type ◽  
Long Run

Purpose – This paper aims to explore the relationship between exports, financial development and economic growth in case of Pakistan. Design/methodology/approach – The autoregressive distributed lag bounds testing approach to cointegration and error correction model are applied to test the long-run and short-run relationships, respectively. The direction of causality between the variables is investigated by the vector error correction model Granger causality test and robustness of causality analysis is tested by applying innovative accounting approach. Findings – The analysis confirms cointegration for the long-run relation between exports, economic growth and financial development in case of Pakistan. The results indicate that economic growth and financial development spur exports growth in Pakistan. The causality analysis reveals feedback hypothesis that exists between financial development and economic growth, financial development and exports, and, exports and economic growth. Originality/value – This study provides new insights for policy makers to sustain exports growth by stimulating economic growth and developing financial sector in Pakistan.

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