The Unassuming Economist

From a paper by Khoirina Cahyani Rahmawati & Widita Kurniasari:

“This study aims to determine the implementation of Okun’s Law, namely the effect of economic growth on the unemployment rate in 30 countries on the Asian continent in the period 2016-2022. The independent variable in this study is economic growth while the dependent variable is the unemployment rate and in this study has control variables namely foreign direct investment, inflation and trade openness. This research uses secondary data obtained from the World Bank. The analysis method in this study uses the panel data regression analysis method on 30 countries on the Asian continent in 2016-2022 using the Stata application. The best model at this stage of the research is the Random Effect Model (REM). Based on the results of the research conducted, it can be seen that (1) the economic growth variable shows a negative and significant relationship with the unemployment rate, (2) the foreign direct investment variable shows a negative relationship and has no significant effect on the unemployment rate, (3) the inflation variable shows a positive and significant relationship with the unemployment rate, (4) the trade openness variable shows a negative and significant relationship with the unemployment rate.”

From Devdiscourse:

“The Confederation of Indian Industry (CII) has urged for employment-centered initiatives in the upcoming FY26 budget to enhance job creation and foster inclusive growth across India. Notably, the CII has proposed a comprehensive seven-point strategy to harness India’s demographic potential effectively.

Among the key recommendations, CII suggests establishing an integrated national employment policy and bolstering labour-intensive sectors. It proposes creating new short-term employment through government internships for the youth in rural areas to bridge the gap between education and job skills. It also emphasizes boosting female workforce participation through dormitory construction and the formalization of sectors like the care economy.

Moreover, there’s a call for an international mobility authority under the Ministry of External Affairs to help young Indians access overseas employment opportunities. This authority aims to collaborate on skill development aligned with global prospects, including language and cultural preparation. CII underscores the need for enhanced productivity alongside job growth, urging for strategic measures to lower India’s Incremental Capital Output Ratio (ICOR).”

From a paper by Sohei Kaihatsu, Shogo Nakano, and Hiroki Yamamoto:

“This paper examines the impact of shifts in long-term inflation expectations on economic activity and price dynamics in Japan using a time-varying parameter vector autoregressive (TVP-VAR) model. Our empirical findings demonstrate that exogenous positive shocks to long-term inflation expectations improve the output gap and generate upward pressure on inflation rates. These results suggest the existence of an “expectations channel” in Japan, whereby higher inflation expectations stimulate private sector spending through mechanisms such as reducing real funding costs. Looking at the analysis by period, it indicates that during the deflationary phase of the 2000s, declining long-term inflation expectations likely contributed to persistent downward pressure on prices, potentially serving as one factor that hindered Japan’s exit from sustained deflation. However, following the introduction of the “price stability target” and Quantitative and Qualitative Monetary Easing (QQE) in 2013, this contribution reversed, appearing to exert upward pressure on inflation rates. In this respect, the findings suggest that the “management of expectations” intended by monetary policy during this period demonstrated some effectiveness. Nevertheless, as inflation rates subsequently declined, the upward contribution of inflation expectations to the inflation rate diminished, failing to anchor expectations to the price stability target. This outcome suggests the inherent difficulty in maintaining a sustained influence on long-term inflation expectations.”

From a paper by Bello Dalhatu:

“In an effort to provide policy recommendations for Nigeria’s transition to full-fledged inflation targeting, this study examines Ghana’s monetary policy frameworks (monetary aggregates targeting and inflation targeting) using ARDL bounds test for cointegration and Error Correction Mechanism (ECM) on annual time series data spanning 1965 to 2022 obtained from the Bank of Ghana database and the World Bank database on World Development Indicators. The results demonstrate that monetary aggregates targeting has not been successful in both the short-run and long-run periods in moderating and stabilizing inflation; however, inflation moderated under inflation targeting in both the short run and the long term. This indicates that inflation targeting proves to be a superior monetary policy framework for inflation control.”

From a paper by Chor Foon Tang and Jiechen Wang:

“Over the last 30 years, China has experienced outstanding economic growth along with significant transformation in its financial system and institutional environment. It has also emerged as the primary destination for substantial foreign direct investment (FDI). Therefore, numerous studies have focused on the roles of FDI, financial development and institutional quality in stimulating the Chinese economy. However, existing literature primarily addresses the direct linear impact on economic growth, neglecting potential non-linear relationships and the roles of institutions and financial development in moderating the FDI–growth nexus. This study employs unit root and Johansen’s cointegration tests to examine the roles of FDI, institutional quality and financial development in explaining economic growth in China from 1985 to 2020. Our results show that FDI, institutions, financial development and growth are cointegrated, with non-linear effects of institutional quality and financial development on growth. Furthermore, the impact of FDI on growth decreases when financial development is high (0.627%–0.517%), but increases with improved institutional quality (0.921%–1.158%). Hence, continuous improvements in institutional quality and the financial system do not uniformly affect economic growth, but significantly influence the contribution of FDI to economic growth in China.”