A Pardigm for Economic Growth in the 21st Century

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Ordean Olson
Ordean Olson

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GJHSS Volume 17 Issue E3

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This study presents a paradigm for determining economic equilibrium in economic systems. The economic disequilibria curve is introduced and shows the robust correlation between productivity and exchange rates and plots the optimal rate of economic growth and interest rates along the economic disequilibria curve. This study examines the evidence for a productivity based model of the dollar/euro real exchange rate. Cointegrating relationships between the real exchange rate and productivity, real price of oil and government spending are estimated using the Johansen and Stock-Watson procedures. The findings show that for each percentage point in the US-Euro productivity differential there is a three point change in the real dollar/euro valuation. These findings are robust to the estimation methodology, the variables included in the regression, and the sample period.

Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

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Not applicable for this article.

Ordean Olson. 2017. \u201cA Pardigm for Economic Growth in the 21st Century\u201d. Global Journal of Human-Social Science - E: Economics GJHSS-E Volume 17 (GJHSS Volume 17 Issue E3): .

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Issue Cover
GJHSS Volume 17 Issue E3
Pg. 29- 44
Journal Specifications

Crossref Journal DOI 10.17406/GJHSS

Print ISSN 0975-587X

e-ISSN 2249-460X

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GJHSS-E Classification: FOR Code: 910103
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v1.2

Issue date

August 14, 2017

Language

English

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This study presents a paradigm for determining economic equilibrium in economic systems. The economic disequilibria curve is introduced and shows the robust correlation between productivity and exchange rates and plots the optimal rate of economic growth and interest rates along the economic disequilibria curve. This study examines the evidence for a productivity based model of the dollar/euro real exchange rate. Cointegrating relationships between the real exchange rate and productivity, real price of oil and government spending are estimated using the Johansen and Stock-Watson procedures. The findings show that for each percentage point in the US-Euro productivity differential there is a three point change in the real dollar/euro valuation. These findings are robust to the estimation methodology, the variables included in the regression, and the sample period.

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A Pardigm for Economic Growth in the 21st Century

Ordean Olson
Ordean Olson

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