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Browsing Economics by Subject "Co-integration"
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Item Investigating the relationship between aggregate savings and investment in Namibia: A causality analysis.(IISTE, 2014) Ogbokor, Cyril A.; Musilika, Oscar AndiyaThe discussion concerning the link between savings and investment in the literature is quite extensive. Most of the past studies concerning this relationship are cross-sectional in nature. The obvious difficulty with such studies is the homogeneity assumption that is usually made across the countries under investigation. Therefore, country specific studies are necessary to shed light on the savings-investment nexus. For Namibia, such studies are very scarce. In light of this, the study tried to fill this gap in some ways by attempting to investigate the causal relationship between savings and investment in Namibia using relevant econometric techniques. The evidence arising from the study suggests that, savings and investment are not co-integrated. In other words, there is no reason to suspect either a long-run or equilibrium relationship between these two variables. This could also be interpreted to imply the existence of high capital mobility. Furthermore, a unidirectional causal relationship between savings and investment in Namibia running from savings to investment was observed. In light of these results, some policy measures were put forward.Item No miracles here: Trade and economic progress.(British Journal of Economics, Finance and Management Sciences, 2015) Ogbokor, Cyril A.Indubitably, striving for greater economic growth that can lead to a general improvement in the well-being of the people constitutes one of the fundamental macroeconomic goals of all modern economies these days. In this study, the possibility of achieving economic growth through trade is investigated. The study employed the unit root test, co-integration test, pairwise Granger-causality test, and forecast error variance decomposition technique to assess the issue under focus by using Namibia as a case study. Further, the study employed quarterly macroeconomic time-series data for the period, 1992 to 2014. The VAR estimates indicate a long-run relationship among the variables investigated. Exports in particular were found to Granger cause economic growth. The forecast error variance decomposition result demonstrates that exports and foreign direct investment contributed more towards innovations in economic growth compared to exchange rate during the chosen time horizon. The study also found that consistently, economic growth itself accounted for a lion share of the innovations that occurred over the selected time horizon. The important message to policymakers in Namibia from the outcome of the study is that the promotion of exports should constitute a crucial part of a country’s macroeconomic policies in order to accelerate economic growth.Item A study of the determinants of mortgage interest rates in Namibia through co-integration and error correction mechanisms.(International Journal of Economics, Commerce and Management, 2014) Ogbokor, Cyril A.; Kwedhi, Ndapwa TulinaDiscussions concerning interest rates, especially mortgage rates are increasingly being given a lot of attention in the literature. Indeed, in realisation of this fact, the study attempted to establish the factors that influence the behaviour of mortgage rates in Namibia, for the period 1994 to 2012. More specifically, it explored the extent to which perturbations in mortgage rates are explained by repo rate, real interest rate and risk premium. We invoked and subsequently applied co-integration and error correction mechanisms in order to investigate the issue under consideration. The result of the study suggested that approximately 68% of the systematic variation in Namibia’s mortgage rates’ swings could be attributed to changes in the three explanatory variables that were used in our econometric model. The bank rate in particular was observed to have a stronger influence on mortgage rates in Namibia. In addition, a long-run relationship was found between mortgage rates and bank rates. Therefore, the need for the Bank of Namibia to rely heavily on the use of the repo rate as a way of controlling, monitoring and influencing developments in the Namibian mortgage market cannot be overstressed.Item Testing the export-led growth paradigm through econometric methods: Empirical evidence from Namibia.(African Journal of Social Sciences, 2015) Ogbokor, Cyril A.Despite the large volume of documented empirical studies in the existing literature concerning the export-led model in the last four decades, the exact connection between exports and economic growth remains largely unanswered. Indeed, both theoretical and empirical inquiries are still seeking for definite answers. Accordingly, this study employs the VAR technique to empirically assess the applicability of the export-led growth model in the context of Namibia through the help of quarterly time-series data-sets for the period covering 1990 to 2012. In this regard, the study tested for the existence of a long-run relationship between exports and economic growth. The results of the unit root test indicated that, foreign direct investment and exchange rate variables attained a stationary status in levels, while real gross domestic product and exports only became stationary after first differencing. The cointegration test suggests a stable long-run relationship among the variables used in the VAR specification. The Granger-causality test found a unidirectional relationship running from exports to economic growth. Therefore, the study recommends that trade policies which encourages export expansion should be aggressively pursuit by the government of Namibia, while simultaneously striving towards improving upon the competiveness of its exports in foreign markets.Item A time series analysis of determinants of savings in Namibia.(IISTE, 2014) Ogbokor, Cyril A.; Samahiya, Obrien MuineThe driving objective of this article was to empirically establish the determinants of savings in Namibia through the use of co-integration and error correction mechanisms for the period running from 1991 to 2012. We made use of quarterly and annual macroeconomic data sets. The quarterly data used were derived from the annual data set that we used in this study. The article relied heavily on unit root tests, co-integration and error correction procedures as ways of investigating the research issue under consideration. First, the time series characteristics of the variables used were ascertained with the help of the augmented Dickey-Fuller unit root procedure. Second, the long-run relationship between savings and its determinants was examined using the procedure suggested in the literature by Johansen and Juselius. The results of the co-integration tests suggest that there is a long-run relationship between savings and the explanatory variables used in the study. The results suggest that inflation and income have positive impact on savings, whilst population growth rate has negative effects on savings. Further, deposit rate and financial deepening have no significant effect on savings. Additionally, the results re-enforces the work of Iipumbu et al (1999). Finally, the need to achieve a higher rate of savings in Namibia by improving upon income levels cannot be overstretched.