Research
Electricity Consumption and Economic Growth in Bangladesh: Co-integration and Causality Analysis
This paper tries to investigate the relationship between economic growth, electricity consumption and investment for Bangladesh through co-integration and causality analysis over the period 1981 to 2011. Using ADP and PP unit root tests it is found that all the three variables are integrated of order 1. The Johansen co-integration tests indicate that all the variables are co-integrated with one co-integrating vector. The Granger F test results show the existence of unidirectional causality running from electricity consumption to economic growth, electricity consumption to investment and investment to economic growth without feedback in the short run. The source of causation in the long run is also found to be the error correction terms from electricity consumption and economic growth to investment. The long run elasticity of economic growth with respect to electricity consumption and investment are higher than their short run elasticity. This implies that over time higher electricity consumption and investment in Bangladesh give rise to more economic growth.
Impact of the Macroeconomic Variables on the Stock Market Returns: The Case of Germany and the United Kingdom
This paper strives to investigate the long-run relationship and the short-run dynamics among macroeconomic fundamentals and the stock returns of Germany and the United Kingdom. Each case was examine individually, by applying Johansen co-integration, error correction model, variance decomposition and impulse response functions, in a system incorporating the variables such as consumer price index (CPI), interest rates, exchange rates, money supply and industrial productions between the periods February 1999 to January 2011. The Johansen co-integration tests indicate that the UK and German stock returns and chosen five macroeconomic variables are co-integrated. The findings also indicate that there are both short and long run causal relationships between stock prices and macroeconomic variables. The results imply the existence of short-term adjustments and long-term dynamics for both the UK and the German stock markets returns and the certain macroeconomic fundamentals. The results of the study also indicate that the variables employed in the VARs explain some of the variation of the stock market indices, while the intensity and the magnitude of the responses are comparable for the US and the German stock markets.
