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Temporal Causality between Human Capital and Real Income in Cointegrated VAR Processes: Empirical Evidence from China, 1960-1990

Author

Listed:
  • Paresh Kumar Narayan

    (Department of Accounting, Finance and Economics, Griffith University, Australia)

  • Russell Smyth

    (Department of Economics, Monash University, Australia)

Abstract

This article examines the causal relationship between human capital and real income using data for China from 1960 to 1999. In the long run there is unidirectional Granger causality running from human capital to real income, while in the short run there is unidirectional Granger causality running from real income to human capital.

Suggested Citation

  • Paresh Kumar Narayan & Russell Smyth, 2004. "Temporal Causality between Human Capital and Real Income in Cointegrated VAR Processes: Empirical Evidence from China, 1960-1990," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 3(1), pages 1-11, April.
  • Handle: RePEc:ijb:journl:v:3:y:2004:i:1:p:1-11
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    References listed on IDEAS

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    2. Asteriou, D. & Agiomirgianakis, G. M., 2001. "Human capital and economic growth: Time series evidence from Greece," Journal of Policy Modeling, Elsevier, vol. 23(5), pages 481-489, July.
    3. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    4. Chuang, Yih-chyi, 2000. "Human Capital, Exports, and Economic Growth: A Causality Analysis for Taiwan, 1952-1995," Review of International Economics, Wiley Blackwell, vol. 8(4), pages 712-720, November.
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    6. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
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    9. Foster, Andrew D & Rosenzweig, Mark R, 1996. "Technical Change and Human-Capital Returns and Investments: Evidence from the Green Revolution," American Economic Review, American Economic Association, vol. 86(4), pages 931-953, September.
    10. Gregory, Allan W. & Hansen, Bruce E., 1996. "Residual-based tests for cointegration in models with regime shifts," Journal of Econometrics, Elsevier, vol. 70(1), pages 99-126, January.
    11. Gregory, Allan W. & Hansen, Bruce E., 1996. "Residual-based tests for cointegration in models with regime shifts," Journal of Econometrics, Elsevier, vol. 70(1), pages 99-126, January.
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    13. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
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    Citations

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    Cited by:

    1. Xiaolei Qian & Russell Smyth, 2006. "Growth Accounting for the Chinese Provinces 1990-2000: Incorporating Human Capital Accumulation," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 4(1), pages 21-37.

    More about this item

    Keywords

    China; human capital; income; cointegration; Granger causality;

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • I2 - Health, Education, and Welfare - - Education

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