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A Bound Test Approach to Cointegration of Tourism Demand

A Bound Test Approach to Cointegration of Tourism Demand

Abstract: Problem statement: Given the high contribution of tourism industry in the Malaysian economy, Malaysia has a vast view to increase its market share of the international tourist arrivals in the Asia Pacific region. Therefore, this study attempts to investigate the long run and short run demand for tourism from top ten markets (country). Approach: To accomplish this objective the ARDL bound test approach to cointegration was carried out for quarterly time series data from 1998:Q1 to 2007: Q3. A three-stage procedure followed to test the direction of causality. In the first stage the order of integration was tested using the Augmented Dickey-Fuller (ADF) and Phillips Perron (PP) unit root tests. The second stage involved testing for the existence of a long-run equilibrium relationship between arrivals, income, tourism price, tourism substitute price and travel cost. The third stage involved constructing standard Granger-type causality tests augmented with a lagged error-correction term where the series were cointegrated. Results: The result of ADF and PP unit root tests confirmed that all variables were stationary at first difference. In addition the results indicated that a long run relationship and between variables. Conclusion: The results indicated that tourists from these ten countries seem to be highly sensitive to the price and the alternative destinations are complementary to Malaysia. In addition the results showed that the outbreak of Severe Acute Respiratory Syndrome (SARS, 2003) had a negative affects significantly affected Malaysia’s tourism demand.
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PRICE TRANSMISSION IN SELECTED MALAYSIAN FRUITS MARKETS

PRICE TRANSMISSION IN SELECTED MALAYSIAN FRUITS MARKETS

The results of Granger causality test are presented in Table 3. On basis of those results, this study detects long run and short run bidirectional causality from farm price to retail price and vice versa for banana and watermelon i.e., there is feedback between the retail and farm levels of those markets, which means that each market level utilizes information from the other to develop its own price expectations. The prices of jackfruits and durian turned out to be set at the farm level market and transmitted up to the retailers in the long run, as indicated by the ECT negative value and statistical significance. Conversely, they deny the existence of a similar relation in the opposite direction, in the short as well as in the long run and in the same direction, in the short run. Likewise, the results for guava, star fruit and papaya suggest a presence of long run as well as short run unidirectional causality from their farm price to retail prices. However, they reject the presence of causality relation from farm to retail price in the short run as well as in the long run; thus, the prices of guava star fruit and papaya are also set in the farm level.
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Model selection, estimation and forecasting in VAR models with short-run and long-run restrictions

Model selection, estimation and forecasting in VAR models with short-run and long-run restrictions

Our simulations cover the three issues of model building, estimation, and forecasting. We examine the performances of model selection criteria that choose p, r and q simultaneously (IC(p, r, q)), and compare their performances with a procedure that chooses p using a standard model selection criterion (IC(p)) and determines the cointegrating rank using a sequence of likelihood ratio tests proposed by Johansen (1988). We provide a comparison of the forecasting accuracy of fitted VARs when only coin- tegration restrictions are imposed, when cointegration and short-run restrictions are jointly imposed, and when neither are imposed. These comparisons take into account the possibility of model misspec- ification in choosing the lag length of the VAR, the number of cointegrating vectors, and the rank of other parameter matrices. In order to estimate the parameters of a model with both long-run and short-run restrictions, we propose a simple iterative procedure similar to the one proposed by Centoni et al. (2007).
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Model selection, estimation and forecasting in VAR models with short-run and long-run restrictions

Model selection, estimation and forecasting in VAR models with short-run and long-run restrictions

How often restrictions of the type considered in this paper are present in VAR approximations to real life data generating processes is an empirical question. Macroeconomic models in which trends and cycles in all variables are generated by a small number of dynamic factors fit in this category. Also, empirical papers that study either regions of the same country or similar countries in the same region often find these kinds of long-run and short-run restrictions. We illustrate the usefulness of the model-selection strategy discussed above in two empirical applications: forecasting Brazilian inflation and U.S. macroeconomic aggregates growth rates. We find gains of imposing short- and long-run restrictions in VAR models, since the VECM(HQ-PIC) and the VECM(AIC+J) outperform the VAR in levels everywhere. Tests of equal variance confirm that these gains are significant. Moreover, ignoring short-run restrictions usually produce inferior forecasts with these data, since the VECM(HQ-PIC) outperforms the VECM(AIC+J) almost everywhere, but these gains are not always significant in tests of equal variance.
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Forecasting multivariate time series under present-value-model short- and long-run co-movement restrictions

Forecasting multivariate time series under present-value-model short- and long-run co-movement restrictions

Our last contribution is to devise a testing strategy for PV restrictions in macro- economics and …nance incorporating more than 20 years of research on this topic. We cover several important issues. First, how to choose consistently the lag length of the VAR. Second, testing for cointegration, common cycles and weak-form common cycles. We discuss a multivariate approach based on the likelihood ratio test (canon- ical correlation analysis) and a single-equation heteroskedasticity robust approach (GMM). Part of our suggested strategy relies on Monte-Carlo simulation results. Fi- nally, we also suggest integrated approaches estimating jointly the lag length of the VAR and long-run and short-run parameters as in Athanasopoulos et al. (2011), and an alternative estimating jointly long-run and short-run parameters as in Centoni, Cubadda and Hecq (2007).
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Model selection, estimation and forecasting in VAR models with short-run and long-run restrictions

Model selection, estimation and forecasting in VAR models with short-run and long-run restrictions

real life data generating processes is an empirical question. Macroeconomic models in which trends and cycles in all variables are generated by a small number of dynamic factors fit in this category. Also, empirical papers that study either regions of the same country or similar countries in the same region often find these kinds of long-run and short-run restrictions. In the empirical example in this paper, we look at jointly forecasting three different measures of consumer price inflation in Brazil, and we find that reduced rank models chosen by the methods considered in this paper produce better forecasts than unrestricted VARs. We also observe that there is some scope for using different reduced rank models for forecasting Brazilian inflation at different horizons, a possibility that is not directly related to the scope of the current paper but can be quite important for users of these forecasts and deserves further research.
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Core GDP: a medium- to long-run measure of Brazilian economic activity

Core GDP: a medium- to long-run measure of Brazilian economic activity

Table 1 shows the results for these three real-time performance-evaluation criteria for the following methods: (i) the Core GDP; (ii) the bandpass filter (BP); (iii) the Christiano- Fitzgerald bandpass filter 5 (CFBP), an optimal approximation to the bandpass filter; (iv) the Core GDP estimate obtained using ordinary principal components instead of gener- alized principal components (PC); and (v) the Brazilian barometer based on Abberger et al. (2014), which is the first principal component of a preselected database following a correlation criteria described in their article. The ability to nowcast c t was not evaluated for the Barometer as the aim of this indicator is not to forecast aggregate GDP accurately but to predict turning points in economic activity.
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Elasticity of substitution between capital and labor: a panel data approach

Elasticity of substitution between capital and labor: a panel data approach

32 In addition it allows us to distinguish between the short run and long run price elasticities and, as it turns out, this distinction is quantitatively significant; the long run [r]

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The Contribution Of FDI Flows To Domestic Investment: An Econometric Analysis Of Developing Countries (Doğrudan Yabancı Sermaye Yatırımlarının Yurtiçi Yatırımlara Etkisi: Gelişmekte Olan Ülkeler İçin Ekonometrik Bir Analiz )

The Contribution Of FDI Flows To Domestic Investment: An Econometric Analysis Of Developing Countries (Doğrudan Yabancı Sermaye Yatırımlarının Yurtiçi Yatırımlara Etkisi: Gelişmekte Olan Ülkeler İçin Ekonometrik Bir Analiz )

empirical investigation focuses on developing economies that need foreign resources- especially FDI which is more preferable sort of foreign capital depending on its less speculative, less volatile and long term property- to finance their economic development; and since investment is accepted as a fundemental determinant of economic growth, the link between FDI and investment have to be considered. The findings from this investigation will provide guadince for the decision makers about the contribution of FDI. If the direct investment is found to crowd out domestic investment, then this result would lead us to question the contribution of direct investment for the host country and to consider what to do to increase the economic benefits from FDI. The sample of the study is selected as Brazil, Russia, South Africa, Turkey and Mexico. The countries other than Turkey are top prospective host economies for 2012 –2014 periods according to the UNCTAD survey that is based on 174 validated company responses. 1
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Growth and exchange rate volatility: a panel data analysis

Growth and exchange rate volatility: a panel data analysis

15 One additional empirical result to be mentioned is that neither the level of exchange rate (real effective) nor the measure of exchange rate misalignment are statistically significant once we incorporate the exchange rate volatility in the growth model. In other words, based on the international experience, exchange rate stability seems to be more important to foster long-run economic growth than exchange rate misalignment, which can be associated with macroeconomic instability without being able to reveal outward-oriented growth strategies. Regarding the lack of robustness of the estimated coefficients of the other control variables, this fact can be seen as an additional support for the absence of consensus in the empirical literature, specially the role of openness or the role of the public sector in promoting economic growth.
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Testing long-run relationship between agricultural gross domestic product and fruits production: evidence from Pakistan

Testing long-run relationship between agricultural gross domestic product and fruits production: evidence from Pakistan

ABSTRACT: This paper analyses the long-run relationship between agricultural gross domestic product (GDP) and fruits production of Pakistan’s economy over a period of 1961-2015 by employing Johansen and autoregressive distributed lag (ARDL) modern econometric technique. Three fruits were selected namely mango, apple and peach in this study. Augmented Dickey-Fuller and Phillips-Perron tests were used to check the data stationarity and conclude that the series are integrated of order one. The Johansen approach was applied to check the joint evolution of all the variables for co-integration. The Johansen test suggests that a long-run co-integration exists between agricultural GDP and fruits production. Results of the ARDL model (Bound test) detect the existence of long-run relationship between agricultural GDP and fruits production. The coefficient of the short-run form of ARDL model reveals that all the fruits have a positive impact on agricultural GDP. Moreover, the coefficients of the long-run form of ARDL model have apositive and significant influence on agricultural GDP of Pakistan. These results suggest that a 1% increase in mango, apple and peach production will increase agricultural GDP by 0.06%, 0.03% and 0.03% respectively. Finally, forecast error variance decomposition and impulse response function results depict that mango, apple and peach production significantly contributes to agricultural GDP in the case of Pakistan.
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Financial Development, International Trade and Economic Growth: Empirical Evidence from Pakistan

Financial Development, International Trade and Economic Growth: Empirical Evidence from Pakistan

The study utilizes the Autoregressive-distributed lag (ARDL) approach for cointegration and Granger causality test, to explore the long run equilibrium relationship and the possible direction of causality between international trade, financial development and economic growth for the Pakistan economy. Imports plus exports of goods and services is used as a proxy for international trade, while broad money (M2) and gross domestic product (GDP) are used as the proxies for financial development and economic growth, respectively. Result explores a long run relationship between the variables. In case of Pakistan, economy supply leading hypothesis is accepted. Moreover, unidirectional causality is observed from international trade to economic growth and from financial development to international trade.
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Interaction of Export Instability and Openness-Growth Nexus In East Asia and Pacific Countries (1990-2006)

Interaction of Export Instability and Openness-Growth Nexus In East Asia and Pacific Countries (1990-2006)

Despite the lack of a unifying theory, there are several partial theories that discuss the role of various factors in determining economic growth. Two main strands can be distinguished: The neoclassical, based on Solow’s growth model, has emphasized the importance of investment and, the more recent; theory of endogenous growth developed by Romer (1986) and Lucas (1988) has drawn attention to human capital and innovation capacity. Furthermore, important contributions on economic growth have been provided by Myrdal’s cumulative causation theory and by the New Economic Geography School. In addition, other explanations have highlighted the significant role non- economic (in the conventional sense) factors play on economic performance. These developments gave rise to a discussion that distinguishes between ‘proximate’ and ‘fundamental’ (or ‘ultimate’) sources of growth. The former refers to issues such as accumulation of capital; labor and technology while the latter to institutions, legal and political systems, socio-cultural factors, demography and geography. Investment is the most fundamental determinant of economic growth identified by both neoclassical and endogenous growth
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The effects of Globalization on Economic Growth

The effects of Globalization on Economic Growth

The results in high-income countries also showed a negative effect from Political globalization to EG in short-run. Dreher et al, (2008) draws attention to the fact that this effect can happened due to political intervention in reducing inequalities. The effects of globalization on EG in the remaining groups of countries showed similar results between them. Only Social globalization have effects in these groups of countries in the short- and long-run. These characteristics suggest that these countries should improve their international networks on social integration like, internet connections, cable TV, newspapers, radios, the promotion of the movement of foreign people and learning about other countries and cultures. The students should go abroad and return with different knowledge. This could provide new information about other countries, for people in countries less globalized, making some kind of benchmarking in order to learn about and implement better practices. Therefore, they could start to take good examples from other cultures, which valorise human rights, schooling, birth control, sustainable building and become more efficient. With a high level of social globalization, a country could have conditions to start creating a good foundation for the strengthening of their economies.
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Braz. J. Pharm. Sci.  vol.47 número3

Braz. J. Pharm. Sci. vol.47 número3

Most active plants are toxic at high doses and it is therefore important to investigate the preliminary toxicity of plant extracts. The Rourea induta species is a potential drug with no phytochemical or biological studies registered in the literature. Thus, a phytochemical study and a toxicity analysis of the ethanolic extract obtained from the leaves of Rourea induta Planch., Connaraceae, was run. A long chain hydrocarbon, n-tetracosane, and four lavonoids were identiied: quercetin, and three glycosylated derivates, quercetin-3-O-α-arabinofuranoside, quercetin-3-O-β-xyloside and quercetin-3-O-β-galactoside. This is the irst time these have been isolated in this species. The structures were elucidated by 13 C NMR, 1 H NMR, UV and IR spectroscopy. The toxicity evaluation of extracts was performed by the brine
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Price and Income Elasticities of Russian Exports

Price and Income Elasticities of Russian Exports

by using the F-test or Wald test. Since the asymptotic distribution of this F- statistic is non-standard, Pesaran et al. (2001) have tabulated two sets of appropriate critical values. One set assumes all variables are I(1) and another assumes that they are all I(0). This provides a band covering all possible classifications of the variables into I(1) and I(0) or even fractionally integrated. If the calculated F-statistic lies above the upper level of the band, the null is rejected, indicating cointegration. If the calculated F statistic falls below the lower level of the band, the null cannot be rejected, supporting lack of cointegration. If, however, it falls within the band, the result is inconclusive. If there is evidence of co-integration, a second stage involves defining the error correction term. This is undertaken in an analogous way to the Eagle and Granger procedure (paragraph 5.2).
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An Application Model for Pervasive Computing

An Application Model for Pervasive Computing

The programming model must allow for the description of abstract user interfaces and abstract services. The structure of the program should be described in terms of tasks and subtasks. The relationship among the tasks must be rich enough that the user interface can be actualized at the various granularities.[1][3] We call this relationship navigation, as it specifies how the user will navigate the sub-tasks that make up the application. The challenges for this programming model are: For example: An application running on a device with a GUI -It may offer a button for the user to perform some action; on a voice-activated device the same action may be performed via a spoken command. Creating a task-based model for program structure - The application should be delineated into tasks and subtasks. A task includes the abstract interaction and the application logic, including the use of the services.[2] The structure is used by the system to generate device specific “presentation units"; e.g., screens. Creating a navigation model - The navigation specifies what causes a task to begin and end (e.g., a user action), and what tasks precede and follow it. This information is complementary to the task structure, and is used by the system to automate the flow of the “presentation units" when the application is running.
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Financing Health Care Expenditure in the OECD Countries: Evidence from a Heterogeneous, Cross- Sectionally Dependent Panel

Financing Health Care Expenditure in the OECD Countries: Evidence from a Heterogeneous, Cross- Sectionally Dependent Panel

This paper studies the long-run economic relationship between health care expenditure and different sources of health expenditure funding computed over total health care expenditure: public, private and expenditures in medicaments, income and other non-income determinants of health care spending in the OECD countries. Using a panel of 30 OECD countries over the period 1990-2009, we investigate the non-stationarity and cointegration properties between health care spending and a set of regressors including the shares of health care expenditure financed by the government, privately and medicaments, income per capita, the dependency rates for old and young age structure. We also attempt to study the relationship between technological progress and health care expenditure using infant mortality as a proxy for changes in medical care technology. The dynamics of health expenditure and this set of regressors as well as their relationship are investigated by estimating a heterogenous panel model with cross sectionally correlated errors. A factor structure is included in the econometric specification with the intent to synthesize the effects of shocks that may hit health spending such as advances in medical care technology, policy shifts, new diseases, and shifts in preferences and expectations by users of health services. The factor structure can capture any contemporaneous correlation that arises from the common response of countries to such unanticipated events.
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The Causal Relationship between Health and Education Expenditures in Malaysia

The Causal Relationship between Health and Education Expenditures in Malaysia

For the short run causality test, the Granger causality test results revealed that the education expenditure Granger-causes health expenditure in Malaysia, but there is no evidence of the reverse causation. For the case of long run causality, the MWALD test results also indicate a unidirectional causality running from education to health expenditures in Malaysia. Interestingly, our empirical evidence appears to suggest that between the two types of human capital investments, investments on education takes precedence over that on health care in Malaysia during the period 1970 to 2007. This is consistent to the finding of Forster et al. (1981) for the case of the United Kingdom (see also Grossman, 1972). An implication of this precedence is that relatively more educated people are knowledgeable about the importance of health compared to less educated ones. They will take necessary steps to ensure that they remain healthy so as to reduce the expenditure on medical services. When confronted with the choice, investing relatively more on education rather than health services would be a more proactive and sensible planning policy. A knowledgeable society is necessary and sufficient condition for a healthier society. Thus, policy initiatives which place importance on education expenditure should be implemented. This would exert positive externalities on other parts of society, including its health aspect, thus eventually generating sustainable economic growth and development.
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Unsupervised Rehabilitation: effects of Exercise Training over the Long Run

Unsupervised Rehabilitation: effects of Exercise Training over the Long Run

exercise according to their own preferences and availabi- lities after an extensive explanation about the fundamentals of physical conditioning. The patients were periodically reassessed on an outpatient basis and were advised to sus- pend exercise practice and to look for medical assistance in case of incidents. The exercise program comprised 3 to 5 sessions per week, lasting 30 to 60 minutes each and rea- ching 70% to 80% of the useful functional capacity (maximal exercise level in the absence of symptoms or clinical or elec- trocardiographic signs) 23 . Physical training comprised jog-
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