Discussion Papers 1999: Department of Economics, University of Leicester, UK

Discussion Papers: 1999

Discussion Papers in Economics series: 1999
Discussion Papers in Public Sector Economics series: 1999
Discussion Papers in European Economics Studies series: 1999

Discussion Papers in Economics series: 1999

99/1 - David Fielding

A Structural Model of Social and Economic Development
(file size: 90K, last updated: 12/1998)

Abstract: In this paper we estimate a model of the determinants of economic and social development that takes seriously three of the criticisms of panel data models in the existing growth literature: that long run coefficients are biased because the lagged dependent variable is not strictly exogenous; that they are biased because of slope coefficient heterogeneity; and that they are biased because of explanatory variable endogeneity. The model indicates that there are strong causal relationships in both directions between on the one hand, economic development, and on the other, social and political development.

99/2 - Dilek Demirbas

Rent-Seeking in Developed and Developing Countries: Cross Section and Time Series Studies
(file size: 106K, last updated: 04/1999)

Abstract: The property rights issue is one of the most important institutional differences between developed/developing countries. The violation of the property rights results with rentseeking. In order to see if the extent of rent-seeking differs significantly between developed and developing countries, I applied a cross section and a time series study with the intention to measure rent-seeking. I found that rent-seeking is low in developed countries whilst it is high in developing counterparts. Turkey, as a developing country was my special case to apply time series study to see if rentseeking vary over the years. In my additional work for Turkey, I found that there is a cointegrating relationship between rent-seeking as a percentage of the budget LnRt and government size ( LnGYt ), and GNP per capita income ( LnGNPCt ).

99/3 - Safa Demirbas

Cointegration Analysis-Causality Testing and Wagner's Law: The Case of Turkey, 1950-1990
(file size: 99K, last updated: 05/1999)

Abstract: This paper investigates statistically the existence of a long-run relationship between public expenditure and GNP (Wagner’s Law) using data for Turkey over the period 1950-1990. Recent advances in time series analysis have permitted the investigation of the long-run relationship between public expenditure and GNP in terms of cointegration analysis. In the case of Wagner’s Law, evidence of cointegration is sufficient to establish a long-run relationship between public expenditure and income. However, to support Wagner’s Law would require unidirectional causality from income to public expenditure. Therefore cointegration should be seen as a necessary condition for Wagner’s Law, but not sufficient. Hence, conditional on cointegration results, it is necessary to look at the causality properties of the model(s). Using the Engle and Granger cointegration test, the Granger Causality test and Turkish time series aggregate data for the period 1950-1990, we find no empirical support for Wagner’s Law.