2019, Volume 72 - Issue 2
RSS feed citation: At RePEc
Publication date: 02 May 2019
THE FELDSTEIN-HORIOKA PUZZLE AND THE GLOBAL FINANCIAL CRISIS: EVIDENCE FROM SOUTH AFRICA USING ASYMMETRIC COINTEGRATION ANALYSISRead the article
THE CAUSAL IMPACT OF STOCK MARKET DEVELOPMENT ON ECONOMIC DEVELOPMENT IN THE UAE: AN ASYMMETRIC APPROACHRead the article
THE IMPACT OF THE DIVIDEND TAX IN SOUTH AFRICA: A DYNAMIC CGE MODEL APPROACHRead the article
MODELING THE VOLATILITY OF EXCHANGE RATE CURRENCY USING GARCH MODELRead the article
AN EMPIRICAL ANALYSIS FOR THE US OF THE EFFECTS OF GOVERNMENT BUDGET DEFICITS ON THE EX ANTE REAL INTEREST RATE YIELDS ON THIRTY-YEAR AND TWENTY-YEAR TREASURY BONDSRead the article
Abdulnasser HATEMI-J, Department of Economics and Finance, College of Business and Economics, United Arab Emirates University
This paper investigates the causal impact of the financial sector on the real or economic sector of the UAE. The underlying data is transformed into partial cumulative sums for positive and negative changes in order to conduct asymmetric causality tests. Allowing for asymmetry is consistent with reality since individuals in financial markets have the tendency to respond more powerfully to a negative news than to a positive one. We also capture the propagation mechanism of a shock in each variable by estimating the generalized impulse response functions, which are not sensitive to the way the variables are ordered in the model. The results reveal that the financial sector has indeed a causal impact on the real sector of the economy. However, the reverse causal impact is not found. These underlying causality results are also confirmed by the generalized impulse response functions.
C32, E44, G19
Stock Market, Economic Development, Asymmetry, the UAE, Causality
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