HUMAN CAPITAL FORMATION AND ECONOMIC GROWTH RELATIONSHIPS: PANEL DATA INSIGHTS FOR THE INDIAN STATES

Imran HUSSAIN

Department of Economics, Vidyasagar University, Midnapore, India

 imranhussaingrp@gmail.com

Ramesh CHANDRA DAS

Department of Economics, Vidyasagar University, Midnapore, India

ramesh051073@gmail.com

(corresponding)

Abstract

The various endogenous growth theories as well as empirical studies have proved that human capital works as an important factor for economy’s growth. The role of income on human capital formation cannot be overlooked so far as the essences of the endogenous growth theories are concerned. Considering this interconnection among the human capital and income of the economy, the present study provides quantitative evidence to show the associations amongst human capital formation as quantified by the governments’ health and education expenditures and income of the economy measured by states’ gross domestic products for the panel of states and union territories of India during the period from 1998-99 to 2018-19. The technique of panel cointegration is used to show the long run relationships among human capital investment and income of the economy, and then the Wald test is used to examine the direction of short-run causality. The empirical results demonstrate that human capital and state incomes have a long-term relationship. The Wald test reveals a short-run linkage between human capital and income of the state economies, with the causality running from human capital investment to output of the economy. i.e., human capital has an immediate influence on the progress of the economy. It is consequently suggested that the governments of the states and union territories make additional investments in sectors such as education and health in order to secure long-term economic prosperity.

Keywords: Human capital, education, health, growth, panel cointegration, Indian states

JEL classification: I1, I2, O3, C32, C33

pp. 57-71

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DO EXPORTS OF OIL AND GAS STILL MATTER FOR REGIONAL ECONOMIC GROWTH OF SUMATRA, INDONESIA?

Saiful HURRI

Ph.D. Scholar in Economics, Faculty of Economics and Business, Universitas Syiah Kuala and Senior Lecturer, Universitas AlMuslim, Bireuen, Indonesia

saifulhurri3@gmail.com

Said MUHAMMAD

Professor, Faculty of Economics and Business, Universitas Syiah Kuala, Indonesia

said@unsyiah.ac.id

Abd. JAMAL

Senior Lecturer, Faculty of Economics and Business, Universitas Syiah Kuala, Indonesia

abdjamal@unsyiah.ac.id

M. Shabri Abd. MAJID*

Senior Lecturer, Faculty of Economics and Business, Universitas Syiah Kuala, Indonesia

mshabri@unsyiah.ac.id

*Corresponding author

Abstract

Although Indonesia ranks as the world’s 17th oil and 6th gas producing country, but its production level has been slowly declining since the last few decades. Amidst the decline of oil and gas production, thus it is important to explore how this impacts the regional economic growth. Specifically, this study attempts to empirically examine the impact of oil and gas and non-oil and gas exports on the regional economic growth of Sumatra, Indonesia over the period 2008-2017 using the generalized method of moments (GMM) approach. The study found that oil and gas exports were no longer contributed positively to regional economic growth. On the other hand, non-oil and gas exports have positively contributed to regional economic growth. This implies that to further promote the growth of the regional economy the focus should be given on the expansion, value-added creation and diversification of non-oil and gas commodities.

Keywords: Regional economic growth, Oil and gas sector, Non-oil and gas sector, GMM, Sumatra.

JEL classification: C32, F43, O11
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LONG RUN RELATIONSHIPS AND SHORT RUN DYNAMICS AMONG UNEMPLOYMENT AND DEMAND COMPONENTS: A STUDY ON SRI LANKA, INDIA AND BANGLADESH

Ramesh CHANDRA DAS

Associate Professor of Economics, Katwa College, WB, India

ramesh051073@gmail.com

Kamal RAY

(Retd), Associate Professor of Economics, Katwa College, WB, India

kamal420ray@yahoo.co.in

Abstract

Unemployment of an economy should have some associations with its aggregate demand components. With time series data for 1996-2015 on three aggregate demand components, namely, consumption expenditure (CON), capital formation (GCF) and public spending (GOV), we did econometric exercises such as cointegration, VECM and Wald test to test whether there are long run equilibrium relationships among unemployment (UN) and the three demand components and directions of their interplays in long run and short run frameworks. Doing appropriate diagnostic checking for the residuals of all the estimations, the results show that all the four series are cointegrated that justifies long run associationships among them. Further, the long run causality analysis through VECM reveals that UN, CON and GCF make a cause to GOV for Sri Lanka.  For India, UN is caused by all three components of aggregate demand and its CON is caused by UN, GCF and GOV. Bangladesh does not produce any such long run causal relationships among the variables. Further for short run causality results, CON is caused by UN, GCF and GOV in Sri Lanka and India, and for Bangladesh and India, there are short run causalities running from CON, GCF and GOV to unemployment. This means, aggregate demand components in India and Bangladesh influence the unemployment rates of these two countries

Keywords: Unemployment, aggregate consumption, government expenses, gross capital formation, cointegration, VECM, Wald test

JEL classification: J64, E21, E22, E24, H5, C32
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